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Are Large Farms More Efficient?

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  • Peterson, Willis L.

Abstract

Accurate estimates of returns to scale require that inputs and output are measured without error and that environmental and managerial differences among firms of varying sizes are taken into account. Measurement problems affecting estimates of returns to scale in agriculture include: (1) combining the farm dwelling with capital inputs, (2) correlation of environmental and management characteristics with size and (3) the effect of off-farm employment on small farm output and production costs. Estimates of long run average total cost curves for farms in the corn belt reveal that after the above factors are taken into account, estimated scale economies in agriculture disappear, while there is evidence of diseconomies as farm size increases.

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  • Peterson, Willis L., 1997. "Are Large Farms More Efficient?," Staff Papers 13411, University of Minnesota, Department of Applied Economics.
  • Handle: RePEc:ags:umaesp:13411
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    File URL: http://ageconsearch.umn.edu/record/13411/files/p97-02.pdf
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    References listed on IDEAS

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    1. Kumbhakar, Subal C & Biswas, Basudeb & Bailey, DeeVon, 1989. "A Study of Economic Efficiency of Utah Dairy Farmers: A System Approach," The Review of Economics and Statistics, MIT Press, vol. 71(4), pages 595-604, November.
    2. Giancarlo Moschini, 1990. "Nonparametric and Semiparametric Estimation: An Analysis of Multiproduct Returns to Scale," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(3), pages 589-596.
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    Cited by:

    1. Mathijs, Erik & Swinnen, Johan F M, 1998. "The Economics of Agricultural Decollectivization in East Central Europe and the Former Soviet Union," Economic Development and Cultural Change, University of Chicago Press, vol. 47(1), pages 1-26, October.
    2. Dries, Liesbeth & Swinnen, Johan F. M., 2002. "Institutional Reform and Labor Reallocation During Transition: Theory Evidence From Polish Agriculture," World Development, Elsevier, vol. 30(3), pages 457-474, March.
    3. Morrison Paul, Catherine J. & Nehring, Richard F. & Banker, David E. & Breneman, Vincent E., 2001. "Productivity Growth, Technological Progress, and Technical Efficiency in the Heartland and Southern Cotton States:1996-1999," 2001 Annual meeting, August 5-8, Chicago, IL 20679, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Zegar, Józef S., 2012. "Gospodarstwa Rodzinne Wobec Wyzwań Wyżywienia I Ochrony Środowiska – Ujęcie Globalne," Village and Agriculture (Wieś i Rolnictwo), Polish Academy of Sciences (IRWiR PAN), Institute of Rural and Agricultural Development, vol. 0(Number 15).
    5. Johan F. M. Swinnen & Liesbeth Dries & Karen Macours, 2005. "Transition and agricultural labor," Agricultural Economics, International Association of Agricultural Economists, vol. 32(1), pages 15-34, January.
    6. Rogier van den Brink & Glen Thomas & Hans Binswanger & John Bruce & Frank Byamugisha, 2005. "Consensus, Confusion, and Controversy : Selected Land Reform Issues in Sub-Saharan Africa," World Bank Publications, The World Bank, number 7387, November.

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    Keywords

    Farm Management; Productivity Analysis;

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