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An Analysis Of Technical, Allocative, And Scale Inefficiency: The Case Of Ecuadorian Dairy Farms

Author

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  • Bailey, DeeVon
  • Biswas, Basudeb
  • Kumbhakar, Subal C.
  • Schulthies, B. Kris

Abstract

The economic efficiency of 68 Ecuadorian dairy farms is investigated by estimating technical, allocative, and scale efficiencies for each using stochastic frontier methodology. Empirical results show that technical inefficiency exists for all of these farms - ranging from 11.8% to 12.8%. Large and medium-sized farms are found to be allocatively more efficient than the small farms as a group. Finally, estimates of scale inefficiency show that most of these farms are producing output at a level below the optimum.

Suggested Citation

  • Bailey, DeeVon & Biswas, Basudeb & Kumbhakar, Subal C. & Schulthies, B. Kris, 1989. "An Analysis Of Technical, Allocative, And Scale Inefficiency: The Case Of Ecuadorian Dairy Farms," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 14(01), pages 1-8, July.
    • Handle: RePEc:ags:wjagec:32456
    DOI: 10.22004/ag.econ.32456
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    References listed on IDEAS

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    1. Biswas, Basudeb & Lacey, John R. & Workman, John P. & Siddoway, Francis H., 1984. "Profit Maximization As A Management Goal On Southeastern Montana Ranches," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 9(01), pages 1-9, July.
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    Cited by:

    1. Shumway, C. Richard, 1995. "Recent Duality Contributions In Production Economics," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 20(01), pages 1-17, July.
    2. Johansson, Helena, 2005. "Technical, Allocative, and Economic Efficiency in Swedish Dairy Farms: The Data Envelopment Analysis Versus the Stochastic Frontier Approach," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24478, European Association of Agricultural Economists.
    3. Boris Bravo-Ureta & Daniel Solís & Víctor Moreira López & José Maripani & Abdourahmane Thiam & Teodoro Rivas, 2007. "Technical efficiency in farming: a meta-regression analysis," Journal of Productivity Analysis, Springer, vol. 27(1), pages 57-72, February.
    4. Michalickova, Monika & Krupova, Zuzana & Krupa, Emil, . "Technical Efficiency and its Determinants in Dairy Cattle," Acta Oeconomica et Informatica, Faculty of Economics and Management, Slovak Agricultural University in Nitra (FEM SPU), vol. 16(01), pages 1-10.
    5. Mkhabela, Thulasizwe S. & Piesse, Jenifer & Thirtle, Colin G. & Vink, Nick, . "Modelling efficiency with farm-produced inputs: dairying in KwaZulu-Natal, South Africa," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 49(01), pages 1-20.
    6. repec:ags:bdbjaf:258303 is not listed on IDEAS
    7. Rouf, Abdur, "undated". "Conventional vs Natural Flood Control and Drainage Managements in a Tidal Coastal Zone: An Evaluation from a Productive Efficiency Perspective," 89th Annual Conference, April 13-15, 2015, Warwick University, Coventry, UK 256023, Agricultural Economics Society.
    8. Vecdi DEMIRCAN & Turan BINICI & Carl R. ZULAUF, 2010. "Assessing pure technical efficiency of dairy farms in Turkey," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 56(3), pages 141-148.
    9. Mishra, Ashok K. & El-Osta, Hisham S. & Johnson, James D., 1999. "Factors Contributing to Earnings Success of Cash Grain Farms," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 31(3), pages 623-637, December.
    10. Bravo-Ureta, Boris E. & Pinheiro, António E., 1993. "Efficiency Analysis of Developing Country Agriculture: A Review of the Frontier Function Literature," Agricultural and Resource Economics Review, Cambridge University Press, vol. 22(1), pages 88-101, April.
    11. Fletschner, Diana K. & Zepeda, Lydia, 2002. "Efficiency Of Small Landholders In Eastern Paraguay," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 27(2), pages 1-19, December.
    12. Ford, Stephen A. & Shonkwiler, J. S., 1994. "The Effect of Managerial Ability on Farm Financial Success," Agricultural and Resource Economics Review, Cambridge University Press, vol. 23(2), pages 150-157, October.
    13. Markus Lampe & Paul Sharp, 2015. "Just add milk: a productivity analysis of the revolutionary changes in nineteenth-century Danish dairying," Economic History Review, Economic History Society, vol. 68(4), pages 1132-1153, November.
    14. Henriksen, Ingrid & Lampe, Markus & Sharp, Paul, 2011. "The role of technology and institutions for growth: Danish creameries in the late nineteenth century," European Review of Economic History, Cambridge University Press, vol. 15(3), pages 475-493, December.
    15. Bravo-Ureta, Boris E. & Jara-Rojas, Roberto & Lachaud, Michee A. & Moreira L., Victor H. & Scheierling, Susanne M., 2015. "Water and Farm Efficiency: Insights from the Frontier Literature," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 206076, Agricultural and Applied Economics Association.
    16. Tim J. Coelli, 1995. "Recent Developments In Frontier Modelling And Efficiency Measurement," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 39(3), pages 219-245, December.
    17. Fernandez-Cornejo, Jorge, 1994. "Nonradial Technical Efficiency And Chemical Input Use In Agriculture," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 23(01), pages 1-11, April.
    18. Paul Sharp & Ingrid Henriksen & Markus Lampe, 2011. "The role of technology and institutions for growth: Danish creameries in the late-19th century," Working Papers 11028, Economic History Society.

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