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Full Product Costs on Base of Farm Accountancy Data by Means of Maximum Entropy

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  • Lips, Markus

Abstract

The paper presents an approach to allocate joint costs to production branches based on maximum entropy. Using bookkeeping data from the Farm Accountancy Data Network (FADN) we derive full product costs. Accordingly, the suggested approach offers the opportunity of full product costs based on actual costing rather than normal costing. The approach is applied for arable crop in Switzerland providing full product costs on a hectare base. The resulting total costs are up to 20 percent higher than in literature. An important reason is labour, which shows for all analysed production branches higher costs than in the actual costing based literature.

Suggested Citation

  • Lips, Markus, 2009. "Full Product Costs on Base of Farm Accountancy Data by Means of Maximum Entropy," 2009 Conference, August 16-22, 2009, Beijing, China 51088, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaae09:51088
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    File URL: http://purl.umn.edu/51088
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    References listed on IDEAS

    as
    1. Golan, Amos & Judge, George G. & Miller, Douglas, 1996. "Maximum Entropy Econometrics," Staff General Research Papers Archive 1488, Iowa State University, Department of Economics.
    2. 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.
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    More about this item

    Keywords

    Full Product Costs; Maximum Entropy; FADN; Arable Crops; Farm Management; M41; Q12;

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • 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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