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Technical efficiency of US dairy farms and federal government programs

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  • Olga Murova
  • Benaissa Chidmi

Abstract

In this article, Technical Efficiency (TE) of dairy farms is estimated and analysed with two methodologies: Data Envelopment Analysis (DEA) and Stochastic Frontier Analysis (SFA). Using DEA, the TE scores for different states are determined. Further, logistic regression is applied to TE scores to explain how known technical and policy variables affect a farm's probability of being efficient. The second methodology employs SFA to estimate and analyse TE scores. Two federal milk policies are considered in this research: marketing policy and milk income loss policy. Federal milk marketing program has shown a significant and negative impact on TE with both methods. Payments under the milk income loss program have shown a positive significant impact in SFA analysis. Both methodologies produced similar outcomes on regional impacts and on the significance of several considered variables. Categorical representation of some variables in graphs provided some additional insights of their effects on TE.

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  • Olga Murova & Benaissa Chidmi, 2013. "Technical efficiency of US dairy farms and federal government programs," Applied Economics, Taylor & Francis Journals, vol. 45(7), pages 839-847, March.
    • Handle: RePEc:taf:applec:45:y:2013:i:7:p:839-847
    DOI: 10.1080/00036846.2011.613772
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    References listed on IDEAS

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    Cited by:

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    2. Piotr Borawski & Beata Kalinowska & Bartosz Mickiewicz & Andrzej Parzonko & Bogdan Klepacki & James Willam Dunn, 2021. "Changes in the Milk Market in the United States on the Background of the European Union and the World," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 1), pages 1010-1033.
    3. Asante, Bright Owusu & Villano, Renato A. & Battese, George E., 2014. "The effect of the adoption of yam minisett technology on the technical efficiency of yam farmers in the forest-savanna transition zone of Ghana," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 9(2), pages 1-16, April.
    4. Gong, Tianchen (Charles) & Battese, George E. & Villano, Renato A., 2019. "Family farms plus cooperatives in China: Technical efficiency in crop production," Journal of Asian Economics, Elsevier, vol. 64(C), pages 1-1.
    5. Zetian Yu & Hao Liu & Hua Peng & Qiantong Xia & Xiaoxia Dong, 2023. "Production Efficiency of Raw Milk and Its Determinants: Application of Combining Data Envelopment Analysis and Stochastic Frontier Analysis," Agriculture, MDPI, vol. 13(2), pages 1-25, February.

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