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Agglomeration Effects in Ontario’s Dairy Farming

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  • Getu Hailu
  • B. James Deaton

Abstract

This paper examines the agglomeration hypothesis, which states that a firm’s productive efficiency is increased by closer proximity to other firms. Using a stochastic input distant function with heteroskedastic inefficiency effects, we find that the density of Ontario dairy farms has a significant positive economic effect on production efficiency. The finding has implications for understanding agricultural firm location and farmer-led efforts to preserve agricultural farming activities in specific locations.

Suggested Citation

  • Getu Hailu & B. James Deaton, 2016. "Agglomeration Effects in Ontario’s Dairy Farming," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(4), pages 1055-1073.
    • Handle: RePEc:oup:ajagec:v:98:y:2016:i:4:p:1055-1073.
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    Cited by:

    1. Richard J Vyn & James Rude, 2020. "The Influence of Supply Management on Farmland Values in Ontario," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 42(4), pages 815-834, December.
    2. Pei Xu & Zehu Jin & Huan Tang, 2022. "Influence Paths and Spillover Effects of Agricultural Agglomeration on Agricultural Green Development," Sustainability, MDPI, vol. 14(10), pages 1-16, May.
    3. Sunhyung Min & Kwansoo Kim, 2024. "Do peers and agglomeration affect farm efficiency?," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 70(8), pages 395-405.
    4. Dayong Huang & Yangyang Zhu & Qiuyue Yu, 2022. "Spatial Spillover Effects of Agricultural Agglomeration on Agricultural Non-Point Source Pollution in the Yangtze River Basin," Sustainability, MDPI, vol. 14(24), pages 1-26, December.
    5. Lialina, Nataliia, 2018. "Вплив Інтенсивності Витрат Кормів На Ефективність Молочного Скотарства," Agricultural and Resource Economics: International Scientific E-Journal, Agricultural and Resource Economics: International Scientific E-Journal, vol. 4(1), March.
    6. Getu Hailu, 2023. "Reflections on technological progress in the agri‐food industry: Past, present, and future," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 71(1), pages 119-141, March.

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    More about this item

    JEL classification:

    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • D1 - Microeconomics - - Household Behavior
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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