Success in maximizing profits and reasons for profit deviation on dairy farms
The weak axiom of profit maximization (WAPM) was used to test how successful each of 70 individual New York State dairy farms was in maximizing profits using nine years of data. The netput vectors were corrected for technological change using nonparametric indices that do not require the assumption of profit maximization nor any functional form for the underlying technology. These technology indices are consistent with the nonparametric assumptions used in the WAPM tests. The average negative WAPM deviation over the 70 farms was 0.20, indicating that on average these farms could have selected available netput vectors that would have increased profits by 20% of total receipts. A tobit regression showed that the available characteristics on these farms explained very little of the variability in their abilities to select the best netput vectors. Yet, increased age and additional education increased the ability to select the best netput vector.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 30 (1998)
Issue (Month): 2 (February)
|Contact details of provider:|| Web page: http://www.tandfonline.com/RAEC20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/RAEC20|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Simon, Herbert A., 1984. "On the behavioral and rational foundations of economic dynamics," Journal of Economic Behavior & Organization, Elsevier, vol. 5(1), pages 35-55, March.
- Featherstone, Allen M. & Moghnieh, Ghassan A. & Goodwin, Barry K., 1995.
"Farm-level nonparametric analysis of cost-minimization and profit-maximization behavior,"
Agricultural Economics of Agricultural Economists,
International Association of Agricultural Economists, vol. 13(2), November.
- Featherstone, Allen M. & Moghnieh, Ghassan A. & Goodwin, Barry K., 1995. "Farm-level nonparametric analysis of cost-minimization and profit-maximization behavior," Agricultural Economics, Blackwell, vol. 13(2), pages 109-117, November.
- Chris Fawson & C. Richard Shumway, 1988. "A Nonparametric Investigation of Agricultural Production Behavior for U.S. Subregions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(2), pages 311-317.
- Afriat, Sidney N, 1972. "Efficiency Estimation of Production Function," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 13(3), pages 568-98, October.
- Fare, Rolf & Shawna Grosskopf & Mary Norris & Zhongyang Zhang, 1994. "Productivity Growth, Technical Progress, and Efficiency Change in Industrialized Countries," American Economic Review, American Economic Association, vol. 84(1), pages 66-83, March.
- Treadway, Arthur B., 1970. "Adjustment costs and variable inputs in the theory of the competitive firm," Journal of Economic Theory, Elsevier, vol. 2(4), pages 329-347, December.
- Varian, Hal R., 1990. "Goodness-of-fit in optimizing models," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 125-140.
- Batra, Raveendra N & Ullah, Aman, 1974. "Competitive Firm and the Theory of Input Demand under Price Uncertainty," Journal of Political Economy, University of Chicago Press, vol. 82(3), pages 537-48, May/June.
- Tauer, Loren W., 1994. "Do New York Dairy Farmers Maximize Profits?," Staff Papers 121318, Cornell University, Department of Applied Economics and Management.
When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:30:y:1998:i:2:p:151-156. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.