IDEAS home Printed from https://ideas.repec.org/a/ags/aareaj/343091.html
   My bibliography  Save this article

The role of hired labour on technical efficiency in an expanding dairy sector: The case of Ireland

Author

Listed:
  • Garcia-Covarrubias, Luis
  • Läpple, Doris
  • Dillon, Emma
  • Thorne, Fiona

Abstract

The 2015 EU milk quota abolition initiated considerable expansion in the dairy sector. This expansion has increased the demand for additional labour in some EU countries, most significantly in Ireland. This paper explores the role of hired labour on Irish dairy farms' technical efficiency (TE). We use a detailed farm-level panel data set of a representative sample from 2000 to 2018. To estimate transient, persistent, and overall TE over time, we apply a 4-component stochastic frontier model. Our findings show significant variation in TE scores over the period. We also control for endogeneity to obtain marginal effects of hired labour on TE. The results reveal that hired labour has a significant yet small, positive effect on farms' TE. Our findings suggest that the effect of hired labour on TE is larger for small and medium-sized farms. This effect is larger when herd size increases.

Suggested Citation

  • Garcia-Covarrubias, Luis & Läpple, Doris & Dillon, Emma & Thorne, Fiona, 2024. "The role of hired labour on technical efficiency in an expanding dairy sector: The case of Ireland," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 68(02), January.
    • Handle: RePEc:ags:aareaj:343091
    DOI: 10.22004/ag.econ.343091
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/343091/files/The%20role%20of%20hired%20labour.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.343091?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Baležentis, Tomas & Sun, Kai, 2020. "Measurement of technical inefficiency and total factor productivity growth: A semiparametric stochastic input distance frontier approach and the case of Lithuanian dairy farms," European Journal of Operational Research, Elsevier, vol. 285(3), pages 1174-1188.
    2. Michel Blanc & Eric E. Cahuzac & Bernard B. Elyakime & Gabriel Tahar, 2008. "Demand for on-farm permanent hired labour on family holdings," Post-Print hal-02668945, HAL.
    3. Michel Blanc & Eric Cahuzac & Bernard Elyakime & Gabriel Tahar, 2008. "Demand for on-farm permanent hired labour on family holdings," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 35(4), pages 493-518, December.
    4. Badi H. Baltagi, 2008. "Forecasting with panel data," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 27(2), pages 153-173.
    5. Tommaso Agasisti & Sabine Gralka, 2019. "The transient and persistent efficiency of Italian and German universities: a stochastic frontier analysis," Applied Economics, Taylor & Francis Journals, vol. 51(46), pages 5012-5030, October.
    6. Lorraine Balaine & Doris Läpple & Emma J Dillon & Cathal Buckley, 2023. "Extension and management pathways for enhanced farm sustainability: evidence from Irish dairy farms," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 50(2), pages 810-850.
    7. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-332.
    8. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    9. Badunenko, Oleg & Kumbhakar, Subal C., 2017. "Economies of scale, technical change and persistent and time-varying cost efficiency in Indian banking: Do ownership, regulation and heterogeneity matter?," European Journal of Operational Research, Elsevier, vol. 260(2), pages 789-803.
    10. Badunenko, Oleg & Kumbhakar, Subal C., 2016. "When, where and how to estimate persistent and transient efficiency in stochastic frontier panel data models," European Journal of Operational Research, Elsevier, vol. 255(1), pages 272-287.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gralka, Sabine, 2018. "Stochastic frontier analysis in higher education: A systematic review," CEPIE Working Papers 05/18, Technische Universität Dresden, Center of Public and International Economics (CEPIE).
    2. Skevas, Ioannis & Emvalomatis, Grigorios & Brümmer, Bernhard, 2018. "Productivity growth measurement and decomposition under a dynamic inefficiency specification: The case of German dairy farms," European Journal of Operational Research, Elsevier, vol. 271(1), pages 250-261.
    3. Ali M. Oumer & Amin Mugera & Michael Burton & Atakelty Hailu, 2022. "Technical efficiency and firm heterogeneity in stochastic frontier models: application to smallholder maize farms in Ethiopia," Journal of Productivity Analysis, Springer, vol. 57(2), pages 213-241, April.
    4. Garcia, Luis & Laepple, Doris & Dillon, Emma & Thorne, Fiona, 2020. "The role of hired labor in transient and persistent technical efficiency on Irish dairy farms," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304395, Agricultural and Applied Economics Association.
    5. Badunenko, Oleg & D’Inverno, Giovanna & De Witte, Kristof, 2023. "On distinguishing the direct causal effect of an intervention from its efficiency-enhancing effects," European Journal of Operational Research, Elsevier, vol. 310(1), pages 432-447.
    6. Manuel Salas‐Velasco, 2020. "Assessing the performance of Spanish secondary education institutions: Distinguishing between transient and persistent inefficiency, separated from heterogeneity," Manchester School, University of Manchester, vol. 88(4), pages 531-555, July.
    7. Raushan Bokusheva & Lukáš Čechura & Subal C. Kumbhakar, 2023. "Estimating persistent and transient technical efficiency and their determinants in the presence of heterogeneity and endogeneity," Journal of Agricultural Economics, Wiley Blackwell, vol. 74(2), pages 450-472, June.
    8. Ferrara, Giancarlo & Kounetas, Konstantinos E., 2024. "US banks efficiency after global financial crisis: Transient and persistent decomposition," The North American Journal of Economics and Finance, Elsevier, vol. 72(C).
    9. Xie, Bai-Chen & Zhang, Zhen-Jiang & Anaya, Karim L., 2021. "Has the unbundling reform improved the service efficiency of China's power grid firms?," Energy Economics, Elsevier, vol. 95(C).
    10. Antony Andrews & Omphile Temoso & Sean Kimpton, 2021. "Persistent and Transient Inefficiency of Australian States and Territories in Providing Public Hospital Services: An Application of Bayesian Stochastic Finite Mixture Frontier Analysis," Economic Papers, The Economic Society of Australia, vol. 40(2), pages 104-115, June.
    11. Bernstein, David H., 2020. "An updated assessment of technical efficiency and returns to scale for U.S. electric power plants," Energy Policy, Elsevier, vol. 147(C).
    12. Tsionas, Mike G. & Izzeldin, Marwan, 2018. "A novel model of costly technical efficiency," European Journal of Operational Research, Elsevier, vol. 268(2), pages 653-664.
    13. Badunenko, Oleg & Myeki, Lindikaya W, 2023. "Multidimensional Analysis of Attainment of Higher Education Goals in South Africa’s Public Universities: Access, Quality, Diversity, Success and Efficiency," MPRA Paper 121570, University Library of Munich, Germany.
    14. Ivan Huljak & Reiner Martin & Diego Moccero, 2021. "Bank productivity in CESEE countries," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue Q2/21, pages 83-104.
    15. Berisso Oumer & Heshmati Almas, 2020. "Farm-heterogeneity and persistent and transient productive efficiencies in Ethiopia’s smallholder cereal farming," IZA Journal of Development and Migration, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 11(1), pages 1-23, January.
    16. Tran, Carolyn D.T.T. & Battese, George E. & Villano, Renato A., 2020. "Administrative capacity assessment in higher education: The case of universities in Vietnam," International Journal of Educational Development, Elsevier, vol. 77(C).
    17. Amjadi, Golnaz & Lundgren, Tommy, 2022. "Is industrial energy inefficiency transient or persistent? Evidence from Swedish manufacturing," Applied Energy, Elsevier, vol. 309(C).
    18. Mamonov Mikhail E. & Parmeter Christopher F. & Prokhorov Artem B., 2022. "Dependence modeling in stochastic frontier analysis," Dependence Modeling, De Gruyter, vol. 10(1), pages 123-144, January.
    19. Karanki, Fecri & Lim, Siew Hoon, 2021. "Airport use agreements and cost efficiency of U.S. airports," Transport Policy, Elsevier, vol. 114(C), pages 68-77.
    20. Badunenko, Oleg & Myeki, Lindikaya W, 2023. "Multidimensional Analysis of Attainment of Higher Education Goals in South Africa’s Public Universities: Access, Quality, Diversity, Success and Efficiency," MPRA Paper 121565, University Library of Munich, Germany.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aareaj:343091. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaresea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.