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Relative Economic Efficiency in the Australian Grazing Industry

Author

Listed:
  • Lawrence, Denis
  • Hone, Phillip

Abstract

The Lau and Yotopoulos restricted profit function methodology for testing for differences in economic efficiency and its components of allocative and technical efficiency is applied to data from grazing properties in the High Rainfall Zone of New South Wales. Tests are made on the basis of property size and operator's age. Larger farms are found to be significantly more economically efficient than smaller farms. The range of data considered in this study is found to exhibit constant returns to scale. Operator's age is found to have no effect on economic, allocative or technical efficiency and both younger and older operators are found to allocate variable inputs optimally. Finally, the usefulness of the methodology for examining issues related to economic efficiency in the Australian agricultural sector is assesed.

Suggested Citation

  • Lawrence, Denis & Hone, Phillip, 1981. "Relative Economic Efficiency in the Australian Grazing Industry," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 49(01), April.
  • Handle: RePEc:ags:remaae:12247
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    File URL: http://purl.umn.edu/12247
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    References listed on IDEAS

    as
    1. Yotopoulos, Pan A & Lau, Lawrence J, 1973. "A Test for Relative Economic Efficiency: Some Further Results," American Economic Review, American Economic Association, vol. 63(1), pages 214-223, March.
    2. Lau, Lawrence J & Yotopoulos, Pan A, 1971. "A Test for Relative Efficiency and Application to Indian Agriculture," American Economic Review, American Economic Association, vol. 61(1), pages 94-109, March.
    3. Sidhu, Surjit S, 1974. "Relative Efficiency in Wheat Production in the Indian Punjab," American Economic Review, American Economic Association, vol. 64(4), pages 742-751, September.
    4. Lawrence, Denis & McKay, Lloyd, 1980. "Inputs, Outputs And Productivity Change In The Australian Sheep Industry," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 24(01), April.
    5. Trosper, Ronald L, 1978. "American Indian Relative Ranching Efficiency," American Economic Review, American Economic Association, vol. 68(4), pages 503-516, September.
    6. McKay, Lloyd & Lawrence, Denis & Vlastuin, Chris, 1980. "Input Demand and Substitution in the Australian Sheep Industry," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 48(02), August.
    7. Atkinson, Scott E & Halvorsen, Robert, 1980. "A Test of Relative and Absolute Price Efficiency in Regulated Utilities," The Review of Economics and Statistics, MIT Press, vol. 62(1), pages 81-88, February.
    8. Byron, R P, 1970. "The Restricted Aitken Estimation of Sets of Demand Relations," Econometrica, Econometric Society, vol. 38(6), pages 816-830, November.
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    Cited by:

    1. I. Fraser & W. Horrace, 2003. "Technical Efficiency of Australian Wool Production: Point and Confidence Interval Estimates," Journal of Productivity Analysis, Springer, vol. 20(2), pages 169-190, September.

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