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Performance of the Norwegian dairy farms: A dynamic stochastic approach

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  • Alem, Habtamu

Abstract

From a theoretical perspective, it is well stated that the farm's decision on the use of inputs depends on the farmer's ability to make an efficient decision over time. The existing literature in performance analysis of the dairy farms based on static modeling and thus ignores the inter-temporal nature of production decisions. This paper aims to construct a dynamic stochastic production frontier incorporating the sluggish adjustment of inputs, to measure the performance of dairy farms in Norway. The empirical application focused on the farm-level analysis of the Norwegian dairy sector for 2000- 2018. The dynamic frontier estimated using the system Generalized Method of Moments estimator. The analysis shows that the static model in the previous studies underestimates the performance of the dairy farms.

Suggested Citation

  • Alem, Habtamu, 2020. "Performance of the Norwegian dairy farms: A dynamic stochastic approach," Research in Economics, Elsevier, vol. 74(3), pages 263-271.
    • Handle: RePEc:eee:reecon:v:74:y:2020:i:3:p:263-271
    DOI: 10.1016/j.rie.2020.07.006
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    Cited by:

    1. Ibán Vázquez-González & María do Mar Pérez-Fra & Ana Isabel García-Arias & Bernardo Valdês-Paços & Edelmiro López-Iglesias, 2021. "Rendered Agroecosystem Services and Dysservices of Dairy Farming: A Bottom-Up Approach in Galicia (Spain)," Sustainability, MDPI, vol. 13(15), pages 1-20, July.
    2. Habtamu Alem, 2023. "The role of green total factor productivity to farm-level performance: evidence from Norwegian dairy farms," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 11(1), pages 1-16, December.
    3. Habtamu Alem, 2021. "The Role of Technical Efficiency Achieving Sustainable Development: A Dynamic Analysis of Norwegian Dairy Farms," Sustainability, MDPI, vol. 13(4), pages 1-11, February.
    4. S.P. Dissanayake & L.H.P. Gunaratne & T. Sivananthawerl & G.A.S Ginigaddara, 2021. "Is Agricultural Sustainability Positively Related with Technical Efficiency? A Case of Paddy-Cattle Integration Farming Systems, Anuradhapura District, Sri Lanka," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 5(12), pages 968-976, December.

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    More about this item

    Keywords

    Dynamic farm management; Dairy farm; Performance; Adjustment of inputs;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D25 - Microeconomics - - Production and Organizations - - - Intertemporal Firm Choice: Investment, Capacity, and Financing
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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