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Estimation of Commodity Specific Production Costs Using German Farm Accountancy Data

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  • Bahta, Sirak Teclemariam
  • Berner, Anja
  • Offermann, Frank

Abstract

A central problem in estimating per unit costs of production originates from the fact that most farms produce multiple outputs and standard farm-accounting data are only available at the whole-farm level. The seemingly unrelated regression (SUR) approach is used to estimate per unit production costs based on German farm accountancy data. Special emphasis is put on outlier detection prior to the estimation of production costs to increase the robustness of the results. Outlier observations are identified based on the Mahalanobis distance for each observation on the data set. It was observed that less negative cost coefficients are estimated after the exclusion of the outliers. The time series analysis of cost estimation based on SUR regression shows the costs of arable crops after 2004, affected by rising prices of fertilizer, seeds and energy, while the increase of livestock production costs after 2006 is attributed to feed costs.

Suggested Citation

  • Bahta, Sirak Teclemariam & Berner, Anja & Offermann, Frank, 2011. "Estimation of Commodity Specific Production Costs Using German Farm Accountancy Data," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114233, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaae11:114233
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    File URL: http://purl.umn.edu/114233
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    References listed on IDEAS

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    1. David Hallam & Alastair Bailey & Philip Jones & Andrew Errington, 1999. "Estimating Input Use and Production Costs From Farm Survey Panel Data," Journal of Agricultural Economics, Wiley Blackwell, vol. 50(3), pages 440-449.
    2. Peeters, Ludo & Surry, Yves R., 2003. "Farm Cost Allocation Based on the Maximum Entropy Methodology - The Case of Saskatchewan Crop Farms," Economic and Market Information 54461, Agriculture and Agri-Food Canada.
    3. P. Midmore, 1990. "Estimating Input-Output Coefficients From Regional Farm Data-A Comment," Journal of Agricultural Economics, Wiley Blackwell, vol. 41(1), pages 108-111.
    4. Nguyen, Duong T.M. & McLaren, Keith Robert & Zhao, Xueyan, 2008. "Multi-Output Broadacre Agricultural Production: Estimating A Cost Function Using Quasi-Micro Farm Level Data From Australia," 2008 Conference (52nd), February 5-8, 2008, Canberra, Australia 6009, Australian Agricultural and Resource Economics Society.
    5. Mack, Gabriele & Mann, Stefan, 2008. "Defining elasticities for PMP models by estimating marginal cost functions based on FADN Data - the case of Swiss dairy production," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6694, European Association of Agricultural Economists.
    6. Yves LĂ©ony & Ludo Peeters & Maurice Quinqu & Yves Surry, 1999. "The Use of Maximum Entropy to Estimate Input-Output Coefficients From Regional Farm Accounting Data," Journal of Agricultural Economics, Wiley Blackwell, vol. 50(3), pages 425-439.
    7. A. Moxey & R. Tiffin, 1994. "Estimating Linear Production Coefficients From Farm Business Survey Data: A Note," Journal of Agricultural Economics, Wiley Blackwell, vol. 45(3), pages 381-385.
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    Cited by:

    1. Tiberti, M., 2013. "Production costs of Soft Wheat in Italy," 2013 Second Congress, June 6-7, 2013, Parma, Italy 149898, Italian Association of Agricultural and Applied Economics (AIEAA).

    More about this item

    Keywords

    Multi-output; outlier detection; production costs; Seemingly Unrelated Regression; Agricultural Finance;

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