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Assessing the Technical and Allocative Efficiency of U.S. Organic Producers

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  • Park, Timothy A.
  • Lohr, Luanne

Abstract

We develop measures of technical and allocative efficiency of producers in marketing certified organic products. A stochastic output distance frontier and the associated revenue share equations are estimated using comprehensive U.S. data on certified organic producers. Farm-level measures of technical efficiency are calculated and factors that enhance performance are identified. Factors that systematically influence allocative efficiency are assessed. The revenue mix of organic producers is systematically inefficient as both male and female producers rely too heavily on revenue from organic markets relative to conventional outlets.

Suggested Citation

  • Park, Timothy A. & Lohr, Luanne, 2010. "Assessing the Technical and Allocative Efficiency of U.S. Organic Producers," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 42(2), May.
    • Handle: RePEc:ags:joaaec:90678
    DOI: 10.22004/ag.econ.90678
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    References listed on IDEAS

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    1. Catherine J. Morrison Paul & Warren E. Johnston & Gerald A. G. Frengley, 2000. "Efficiency in New Zealand Sheep and Beef Farming: The Impacts of Regulatory Reform," The Review of Economics and Statistics, MIT Press, vol. 82(2), pages 325-337, May.
    2. Rodriguez-Alvarez, Ana & Fernandez-Blanco, Victor & Lovell, C. A. Knox, 2004. "Allocative inefficiency and its cost:: The case of Spanish public hospitals," International Journal of Production Economics, Elsevier, vol. 92(2), pages 99-111, November.
    3. Paul, Catherine J. Morrison & Nehring, Richard, 2005. "Product diversification, production systems, and economic performance in U.S. agricultural production," Journal of Econometrics, Elsevier, vol. 126(2), pages 525-548, June.
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    Cited by:

    1. Zúniga-González, Carlos Alberto, 2009. "Technical efficiency of Organic Fertilizer in small farms of Nicaragua: 1998-2005," 111th Seminar, June 26-27, 2009, Canterbury, UK 53078, European Association of Agricultural Economists.
    2. Volpe III, Rickard James, 2014. "National Brands, Private Labels, and Food Price Inflation," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 46(4), pages 1-16, November.
    3. Spiegel, Alisa & Coletta, Attilio & Severini, Simone, 2022. "The distortive effect of organic payments: An example of policy failure in the case of hazelnut plantation," Land Use Policy, Elsevier, vol. 119(C).

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    More about this item

    Keywords

    Agribusiness; Farm Management; Marketing; Production Economics; Productivity Analysis; Public Economics;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development

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