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Returns to Managerial Ability and Technical Efficiency in Argentina Dairy Farms

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  • Gallacher, M.
  • Lema, D.

Abstract

This paper explores the returns to managerial ability and his role in determining efficiency in Argentina dairy farms. Using an unbalanced panel data from 2003 through 2009 we estimate production frontiers and technical efficiency effects. Most studies analyzing the impact of human capital in agriculture use the measure of years of schooling of the producer as a proxy for decision-making skills. An alternative measure is used in this paper. The measure was derived by grading decision-making and execution skills of the farmers. Grades were assigned by farm advisors knowledgeable of each farm and producer characteristics. Assigned grades were then used in the production frontiers as inputs to estimate the impact of management skills on firm-level results. A very significant impact of these skills on firm results and on technical efficiency and was found. Acknowledgement :

Suggested Citation

  • Gallacher, M. & Lema, D., 2018. "Returns to Managerial Ability and Technical Efficiency in Argentina Dairy Farms," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277323, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaae18:277323
    DOI: 10.22004/ag.econ.277323
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    File URL: https://ageconsearch.umn.edu/record/277323/files/1666.pdf
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    References listed on IDEAS

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    1. Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-795, December.
    2. Huffman, Wallace E, 1980. "Farm and Off-Farm Work Decisions: The Role of Human Capital," The Review of Economics and Statistics, MIT Press, vol. 62(1), pages 14-23, February.
    3. Huffman, Wallace E., 2001. "Human capital: Education and agriculture," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.),Handbook of Agricultural Economics, edition 1, volume 1, chapter 7, pages 333-381, Elsevier.
    4. Byma, Justin P. & Tauer, Loren W., 2010. "Exploring the Role of Managerial Ability in Influencing Dairy Farm Efficiency," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 39(3), pages 1-12, October.
    5. Gallacher, Marcos & Goetz, Stephan J. & Debertin, David L., 1994. "Managerial form, ownership and efficiency: a case-study of Argentine agriculture," Agricultural Economics, Blackwell, vol. 11(2-3), pages 289-299, December.
    6. Anderson, Jock R. & Dillon, John L. & Hardaker, Brian, 1977. "Agricultural Decision Analysis," Monographs: Applied Economics, AgEcon Search, number 288652, October.
    7. Willam Greene, 2005. "Fixed and Random Effects in Stochastic Frontier Models," Journal of Productivity Analysis, Springer, vol. 23(1), pages 7-32, January.
    8. Schultz, Theodore W, 1975. "The Value of the Ability to Deal with Disequilibria," Journal of Economic Literature, American Economic Association, vol. 13(3), pages 827-846, September.
    9. Kumbhakar, Subal C., 1990. "Production frontiers, panel data, and time-varying technical inefficiency," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 201-211.
    10. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-332.
    11. Wallace E. Huffman, 1977. "Allocative Efficiency: The Role of Human Capital," The Quarterly Journal of Economics, Oxford University Press, vol. 91(1), pages 59-79.
    12. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
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    Cited by:

    1. Marcos Gallacher, 2020. "The human factor in Argentine agriculture," CEMA Working Papers: Serie Documentos de Trabajo. 746, Universidad del CEMA.

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    Keywords

    Livestock Production/Industries;

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