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Efficiency of Scottish Farms: A Stochastic Cost Frontier Analysis

Author

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  • Revoredo-Giha, Cesar
  • Milne, Catherine E.
  • Leat, Philip M.K.
  • Cho, Woong Je

Abstract

In this paper the relative cost efficiency of Scottish farms is determined, and variables that explain this efficiency by farm type are identified and implications discussed. A panel dataset from the Farm Accounts Scheme (FAS) survey for the period 1997-2004 was used for the estimation. A cost efficiency indicator was measured using a fixed effect panel data regression. Further analysis, to explain the efficiency results, indicated the presence of important farm size and regional effects. However, other variables, whilst statistically significant, did not produce a consistent effect across the different farm types.

Suggested Citation

  • Revoredo-Giha, Cesar & Milne, Catherine E. & Leat, Philip M.K. & Cho, Woong Je, 2009. "Efficiency of Scottish Farms: A Stochastic Cost Frontier Analysis," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 10(2), pages 1-19, July.
    • Handle: RePEc:ags:aergaa:56633
    DOI: 10.22004/ag.econ.56633
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    References listed on IDEAS

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    1. Paul Wilson & Dave Hadley & Stephen Ramsden & Ioannis Kaltsas, 1998. "Measuring and Explaining Technical Efficiency in UK Potato Production," Journal of Agricultural Economics, Wiley Blackwell, vol. 49(3), pages 294-305, September.
    2. Wilson, Paul & Hadley, David & Asby, Carol, 2001. "The influence of management characteristics on the technical efficiency of wheat farmers in eastern England," Agricultural Economics, Blackwell, vol. 24(3), pages 329-338, March.
    3. Caves, Douglas W & Christensen, Laurits R & Tretheway, Michael W, 1980. "Flexible Cost Functions for Multiproduct Firms," The Review of Economics and Statistics, MIT Press, vol. 62(3), pages 477-481, August.
    4. Andrew Barnes, 2008. "Technical Efficiency Estimates of Scottish Agriculture: A Note," Journal of Agricultural Economics, Wiley Blackwell, vol. 59(2), pages 370-376, June.
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    1. repec:ags:ijamad:151891 is not listed on IDEAS
    2. Jiang, Nan & Sharp, Basil, 2014. "Cost Efficiency of Dairy Farming in New Zealand: A Stochastic Frontier Analysis," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 0, pages 1-13.
    3. Ángel L. Martín‐Román & Jaime Cuéllar‐Martín & Alfonso Moral, 2023. "Natural and cyclical unemployment: A stochastic frontier decomposition and economic policy implications," Bulletin of Economic Research, Wiley Blackwell, vol. 75(1), pages 5-39, January.
    4. Cuéllar Martín, Jaime & Martín-Román, Ángel L. & Moral, Alfonso, 2017. "A composed error model decomposition and spatial analysis of local unemployment," MPRA Paper 79783, University Library of Munich, Germany.
    5. Kangile, Rajabu Joseph, 2015. "Efficiency In Production By Smallholder Rice Farmers Under Cooperative Irrigation Schemes In Pwani And Morogoro Regions, Tanzania," Research Theses 265681, Collaborative Masters Program in Agricultural and Applied Economics.
    6. Aysun, Uluc & Bouvet, Florence & Hofler, Richard, 2014. "An alternative measure of structural unemployment," Economic Modelling, Elsevier, vol. 38(C), pages 592-603.
    7. Moradi, Ebrahim & Pahlavani, Mosayeb & Akbari, Ahmad & Bashrabadi, Hossain Mehrabi, 2013. "Comparative Analysis of Stochastic Frontier Partially non-parametric and Stochastic Frontier Parametric Methods Case Study: Measuring Cost Efficiency in Wheat Production in Iran," International Journal of Agricultural Management and Development (IJAMAD), Iranian Association of Agricultural Economics, vol. 3(2), pages 1-8, June.
    8. Revoredo-Giha, Cesar & Leat, Philip M.K. & Milne, Catherine E., 2010. "A Structural Change Analysis Of The Cost Efficiency Of Farms In Scotland 1989-2008," Working Papers 109398, Scotland's Rural College (formerly Scottish Agricultural College), Land Economy & Environment Research Group.
    9. Joseph Kangile, Rajabu, 2015. "Efficiency in Production By Smallholder Rice Farmers Under Cooperative Irrigation Schemes in Pwani and Morogoro Regions, Tanzania," Research Theses 243447, Collaborative Masters Program in Agricultural and Applied Economics.
    10. Ferrara, Giancarlo & Vidoli, Francesco, 2017. "Semiparametric stochastic frontier models: A generalized additive model approach," European Journal of Operational Research, Elsevier, vol. 258(2), pages 761-777.

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    Keywords

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