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Economies of Scale in the Floriculture Industry

Author

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  • Schumacher, Sara K.
  • Marsh, Thomas L.

Abstract

This study investigated the cost structure of the floriculture industry in the United States. Economies of scale and input elasticities were estimated with a normalized quadratic cost function. Results suggest that economies of scale exist in the floriculture industry. As producers become large and more automated, they have a cost advantage relative to smaller producers who are producing the same output product mix. The existence of economies of scale suggests that average grower size can increase in the future as growers increase in size to take advantage of cost efficiencies.

Suggested Citation

  • Schumacher, Sara K. & Marsh, Thomas L., 2003. "Economies of Scale in the Floriculture Industry," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 35(03), December.
  • Handle: RePEc:ags:joaaec:43145
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    Cited by:

    1. Klaus Deininger & Songqing Jin, 2008. "Land Sales and Rental Markets in Transition: Evidence from Rural Vietnam," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 70(1), pages 67-101, February.
    2. Henry Vega, 2008. "The Transportation Costs of Fresh Flowers: A Comparison between Ecuador and Major Exporting Countries," IDB Publications (Working Papers) 9293, Inter-American Development Bank.
    3. Henry Vega, 2008. "Transportation Costs of Fresh Flowers: A Comparison across Major Exporting Countries," IDB Publications (Working Papers) 48178, Inter-American Development Bank.
    4. Daniel Atsbeha & Dadi Kristofersson & Kyrre Rickertsen, 2015. "Broad breeding goals and production costs in dairy farming," Journal of Productivity Analysis, Springer, vol. 43(3), pages 403-415, June.

    More about this item

    Keywords

    duality; economies of scale; floriculture; nonprice variables; Q12; C31; D20;

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • D20 - Microeconomics - - Production and Organizations - - - General

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