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Analysis of the Economic Activity of Dairy Farms in Poland: Results obtained from the Short-run Cost Function

Author

Listed:
  • Jerzy Marzec

    (Uniwersytet Ekonomiczny w Krakowie)

  • Andrzej Pisulewski

    (Uniwersytet Rolniczy im. Hugona Kołłątaja w Krakowie)

Abstract

The aim of the research was the analysis of Polish dairy farms under the assumption of cost minimizing behavior. This implies that cost inefficiency can be attributable to technical or allocative inefficiency. The panel data on economic results of dairy farms was provided by FADN (Farm Accountancy Data Network). The main results have been obtained when employing translog variable cost function and using a Bayesian approach. Among the four analyzed cost elasticities, the highest has been found with respect to materials and the lowest one with respect to livestock. The estimation of returns to scale indicates the increasing economies of scale, both short-term and long-term. However, in the covered period (2004–2011) the returns to scale were steadily declining. In the above-mentioned period, the average cost efficiency of Polish dairy farms equaled 68%.

Suggested Citation

  • Jerzy Marzec & Andrzej Pisulewski, 2015. "Analysis of the Economic Activity of Dairy Farms in Poland: Results obtained from the Short-run Cost Function," Collegium of Economic Analysis Annals, Warsaw School of Economics, Collegium of Economic Analysis, issue 39, pages 167-182.
    • Handle: RePEc:sgh:annals:i:39:y:2015:p:167-182
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    References listed on IDEAS

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    More about this item

    Keywords

    stochastic frontier models; cost efficiency; panel data; dairy farms;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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