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Rationalising inefficiency in agricultural production – the case of Swedish dairy agriculture
[Formulation and estimation of stochastic frontier production function models]

Author

Listed:
  • Helena Hansson
  • Gordana Manevska-Tasevska
  • Mette Asmild

Abstract

Inefficiency in agricultural production is generally interpreted as waste in the use of production factors. We challenge this by (i) providing an explanation for why apparent inefficiency may result, at least partly, from rational production decisions by farmers and (ii) testing this rational inefficiency hypothesis empirically. Based on multidirectional efficiency analysis of production data from 2013 for 421 Swedish dairy farms and statistical analyses of the inefficiency patterns, we provide support for the existence of rational inefficiency. These findings have clear implications for policy schemes aiming at pushing farms towards the efficient production frontier.

Suggested Citation

  • Helena Hansson & Gordana Manevska-Tasevska & Mette Asmild, 2020. "Rationalising inefficiency in agricultural production – the case of Swedish dairy agriculture [Formulation and estimation of stochastic frontier production function models]," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 47(1), pages 1-24.
    • Handle: RePEc:oup:erevae:v:47:y:2020:i:1:p:1-24.
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    File URL: http://hdl.handle.net/10.1093/erae/jby042
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    Citations

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    Cited by:

    1. Zhu, Liyun & Schneider, Kevin & Oude Lansink, Alfons, 2023. "Economic, environmental, and social inefficiency assessment of Dutch dairy farms based on the dynamic by-production model," European Journal of Operational Research, Elsevier, vol. 311(3), pages 1134-1145.
    2. Leduc, Gaëlle & Billaudet, Larissa & Engström, Ebba & Hansson, Helena & Ryan, Mary, 2023. "Farmers' perceived values in conventional and organic farming: A comparison between French, Irish and Swedish farmers using the Means-end chain approach," Ecological Economics, Elsevier, vol. 207(C).
    3. Amer Ait Sidhoum & K Hervé Dakpo & Laure Latruffe, 2022. "Trade-offs between economic, environmental and social sustainability on farms using a latent class frontier efficiency model: Evidence for Spanish crop farms," PLOS ONE, Public Library of Science, vol. 17(1), pages 1-17, January.
    4. Uehleke, Reinhard & Seifert, Stefan & Hüttel, Silke, 2020. "Animal welfare and production efficiency in German pork production," 94th Annual Conference, April 15-17, 2020, K U Leuven, Belgium (Cancelled) 303695, Agricultural Economics Society - AES.
    5. Birhanu Addisu Adamie & Helena Hansson, 2022. "Rationalising inefficiency in dairy production: evidence from an over-time approach," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 49(2), pages 433-471.
    6. Uehleke, Reinhard & Seifert, Stefan & Hüttel, Silke, 2020. "Animal welfare and production efficiency in German pork production," 94th Annual Conference, April 15-17, 2020, K U Leuven, Belgium (Cancelled) 303695, Agricultural Economics Society - AES.
    7. Manevska-Tasevska, Gordana & Hansson, Helena & Asmild, Mette & Surry, Yves, 2021. "Exploring the regional efficiency of the Swedish agricultural sector during the CAP reforms ‒ multi-directional efficiency analysis approach," Land Use Policy, Elsevier, vol. 100(C).
    8. Nicola GALLUZZO, 2023. "An Analysis Of Crop Costs In Italian Nitrate Vulnerable Areas And Agri-Environmental Subsidies," Agricultural Economics and Rural Development, Institute of Agricultural Economics, vol. 20(1), pages 15-28.
    9. Grzelak, Aleksander, 2023. "Return on Assets in Farms and the Context of Economic Rationality in Poland and Selected European Union Countries," Roczniki (Annals), Polish Association of Agricultural Economists and Agribusiness - Stowarzyszenie Ekonomistow Rolnictwa e Agrobiznesu (SERiA), vol. 2023(4).

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