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Environmentally harmful by-products in efficiency analysis: An example of nitrogen surplus on Swiss dairy farms

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  • Mamardashvili, Phatima
  • Jan, Pierrick

Abstract

Beside desirable outputs, farming generates environmentally harmful by-products. In this article, we include nitrogen surplus of farms in the representation of the production technology and assessed performance of farms. We measure environmental efficiency (EE) in the framework of a translog output distance function. EE shows by how much a farm can reduce its nitrogen surplus, given multiple inputs and multiple outputs. The study use bookkeeping data on dairy farms in the mountainous region of Switzerland. The analyses show that considering nitrogen surplus has a minor effect on the ranking of farms in terms of technical efficiency. Further, the results indicate relatively low average values for EE, suggesting a need for additional policy measures to reduce farm nitrogen surpluses.

Suggested Citation

  • Mamardashvili, Phatima & Jan, Pierrick, 2014. "Environmentally harmful by-products in efficiency analysis: An example of nitrogen surplus on Swiss dairy farms," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182910, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaae14:182910
    DOI: 10.22004/ag.econ.182910
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    1. Fernandez C. & Koop G. & Steel M.F.J., 2002. "Multiple-Output Production With Undesirable Outputs: An Application to Nitrogen Surplus in Agriculture," Journal of the American Statistical Association, American Statistical Association, vol. 97, pages 432-442, June.
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    4. Fare, Rolf & Grosskopf, Shawna & Noh, Dong-Woon & Weber, William, 2005. "Characteristics of a polluting technology: theory and practice," Journal of Econometrics, Elsevier, vol. 126(2), pages 469-492, June.
    5. Ramilan, Thiagarajah & Scrimgeour, Frank & Marsh, Dan, 2011. "Analysis of environmental and economic efficiency using a farm population micro-simulation model," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 81(7), pages 1344-1352.
    6. Stijn Reinhard & C.A. Knox Lovell & Geert Thijssen, 1999. "Econometric Estimation of Technical and Environmental Efficiency: An Application to Dutch Dairy Farms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(1), pages 44-60.
    7. Fare, Rolf & Grosskopf, Shawna & Weber, William L., 2006. "Shadow prices and pollution costs in U.S. agriculture," Ecological Economics, Elsevier, vol. 56(1), pages 89-103, January.
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    Keywords

    Productivity Analysis;

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