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An econometric decomposition of dairy output growth

  • Ahmad, Munir
  • Boris E., Bravo-Ureta

Fixed effects production functions and stochastic production frontiers are estimated and used to decompose dairy farm output growth into technological progress, technical efficiency, and increased input use or the size effect. Unbalanced panel data for ninety-six Vermont dairy farmers for the 1971-84 period are utilized. The results show a 2.5% average annual increase in milk output. About 56% of this growth is attributed to the size effect and the remaining 44% to productivity growth. Technological progress contributed about 94% to total productivity growth, while improvements in technical efficiency accounted for only 6%.

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File URL: http://mpra.ub.uni-muenchen.de/37678/1/MPRA_paper_37678.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 37678.

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Date of creation: 1995
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Publication status: Published in American Journal of Agricultural Economics 4.77(1995): pp. 915-921
Handle: RePEc:pra:mprapa:37678
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  1. Byrnes, Patricia, et al, 1987. "Technical Efficiency and Size: The Case of Illinois Grain Farms," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 14(4), pages 367-81.
  2. Tauer, Loren W. & Belbase, Krishna P., 1987. "Technical Efficiency Of New York Dairy Farms," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 16(1), April.
  3. Cornwell, Christopher & Schmidt, Peter & Sickles, Robin C., 1990. "Production frontiers with cross-sectional and time-series variation in efficiency levels," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 185-200.
  4. Bauer, Paul W., 1990. "Recent developments in the econometric estimation of frontiers," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 39-56.
  5. 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.
  6. Paul W. Bauer, 1988. "Decomposing TFP growth in the presence of cost inefficiency, nonconstant returns to scale, and technological progress," Working Paper 8813, Federal Reserve Bank of Cleveland.
  7. 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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