IDEAS home Printed from https://ideas.repec.org/a/taf/applec/45y2013i7p839-847.html
   My bibliography  Save this article

Technical efficiency of US dairy farms and federal government programs

Author

Listed:
  • Olga Murova
  • Benaissa Chidmi

Abstract

In this article, Technical Efficiency (TE) of dairy farms is estimated and analysed with two methodologies: Data Envelopment Analysis (DEA) and Stochastic Frontier Analysis (SFA). Using DEA, the TE scores for different states are determined. Further, logistic regression is applied to TE scores to explain how known technical and policy variables affect a farm's probability of being efficient. The second methodology employs SFA to estimate and analyse TE scores. Two federal milk policies are considered in this research: marketing policy and milk income loss policy. Federal milk marketing program has shown a significant and negative impact on TE with both methods. Payments under the milk income loss program have shown a positive significant impact in SFA analysis. Both methodologies produced similar outcomes on regional impacts and on the significance of several considered variables. Categorical representation of some variables in graphs provided some additional insights of their effects on TE.

Suggested Citation

  • Olga Murova & Benaissa Chidmi, 2013. "Technical efficiency of US dairy farms and federal government programs," Applied Economics, Taylor & Francis Journals, vol. 45(7), pages 839-847, March.
    • Handle: RePEc:taf:applec:45:y:2013:i:7:p:839-847
    DOI: 10.1080/00036846.2011.613772
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00036846.2011.613772
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00036846.2011.613772?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Leopold Simar & Paul Wilson, 2000. "A general methodology for bootstrapping in non-parametric frontier models," Journal of Applied Statistics, Taylor & Francis Journals, vol. 27(6), pages 779-802.
    2. Meeusen, Wim & van den Broeck, Julien, 1977. "Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 435-444, June.
    3. Ahmad, Munir & Boris E., Bravo-Ureta, 1996. "Technical efficiency measures for dairy farms using panel data: a comparison of alternative model specifications," MPRA Paper 37703, University Library of Munich, Germany.
    4. Abdul Wadud & Ben White, 2000. "Farm household efficiency in Bangladesh: a comparison of stochastic frontier and DEA methods," Applied Economics, Taylor & Francis Journals, vol. 32(13), pages 1665-1673.
    5. Kelvin Balcombe & Iain Fraser & Jae Kim, 2006. "Estimating technical efficiency of Australian dairy farms using alternative frontier methodologies," Applied Economics, Taylor & Francis Journals, vol. 38(19), pages 2221-2236.
    6. Awudu Abdulai & Hendrik Tietje, 2007. "Estimating technical efficiency under unobserved heterogeneity with stochastic frontier models: application to northern German dairy farms," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 34(3), pages 393-416, September.
    7. Banker, Rajiv D. & Gadh, Vandana M. & Gorr, Wilpen L., 1993. "A Monte Carlo comparison of two production frontier estimation methods: Corrected ordinary least squares and data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 67(3), pages 332-343, June.
    8. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Haonan Zhang & Zheng Chen & Jieyong Wang & Haitao Wang & Yingwen Zhang, 2023. "Spatial-Temporal Pattern of Agricultural Total Factor Productivity Change (Tfpch) in China and Its Implications for Agricultural Sustainable Development," Agriculture, MDPI, vol. 13(3), pages 1-17, March.
    2. Piotr Borawski & Beata Kalinowska & Bartosz Mickiewicz & Andrzej Parzonko & Bogdan Klepacki & James Willam Dunn, 2021. "Changes in the Milk Market in the United States on the Background of the European Union and the World," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 1), pages 1010-1033.
    3. Asante, Bright Owusu & Villano, Renato A. & Battese, George E., 2014. "The effect of the adoption of yam minisett technology on the technical efficiency of yam farmers in the forest-savanna transition zone of Ghana," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 9(2), pages 1-16, April.
    4. Gong, Tianchen (Charles) & Battese, George E. & Villano, Renato A., 2019. "Family farms plus cooperatives in China: Technical efficiency in crop production," Journal of Asian Economics, Elsevier, vol. 64(C), pages 1-1.
    5. Zetian Yu & Hao Liu & Hua Peng & Qiantong Xia & Xiaoxia Dong, 2023. "Production Efficiency of Raw Milk and Its Determinants: Application of Combining Data Envelopment Analysis and Stochastic Frontier Analysis," Agriculture, MDPI, vol. 13(2), pages 1-25, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Álvaro Ramírez Suárez, 2013. "Análisis de eficiencia económica de fincas arroceras: una aplicación de una función determinística de ingresos brutos frontera," Revista Lebret, Universidad Santo Tomás - Bucaramanga, vol. 5, pages 213-240, December.
    2. Álvaro Ramírez Suárez, 2013. "Análisis de eficiencia económica de fincas arroceras: una aplicación de una función determinística de ingresos brutos frontera," Revista Lebret, Universidad Santo Tomás - Bucaramanga, vol. 5, pages 213-240, December.
    3. Luis R. Murillo‐Zamorano, 2004. "Economic Efficiency and Frontier Techniques," Journal of Economic Surveys, Wiley Blackwell, vol. 18(1), pages 33-77, February.
    4. Phu Nguyen-Van & Nguyen To-The, 2016. "Technical efficiency and agricultural policy: evidence from the teaproduction in Vietnam," Review of Agricultural, Food and Environmental Studies, INRA Department of Economics, vol. 97(3), pages 173-184.
    5. Kao, Chiang & Liu, Shiang-Tai, 2009. "Stochastic data envelopment analysis in measuring the efficiency of Taiwan commercial banks," European Journal of Operational Research, Elsevier, vol. 196(1), pages 312-322, July.
    6. Oleg Badunenko & Daniel J. Henderson & Subal C. Kumbhakar, 2012. "When, where and how to perform efficiency estimation," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 175(4), pages 863-892, October.
    7. Otieno, David Jakinda & Hubbard, Lionel J. & Ruto, Eric, 2012. "Determinants of technical efficiency in beef cattle production in Kenya," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 125853, International Association of Agricultural Economists.
    8. Lakner, Sebastian & Breustedt, Gunnar, 2015. "Efficiency analysis of organic farming systems- a review of methods, topics, results, and conclusions," 2015 Conference, August 9-14, 2015, Milan, Italy 212025, International Association of Agricultural Economists.
    9. Vu Hoang Linh, 2012. "Efficiency of rice farming households in Vietnam," International Journal of Development Issues, Emerald Group Publishing Limited, vol. 11(1), pages 60-73, April.
    10. I. Fraser & W. Horrace, 2003. "Technical Efficiency of Australian Wool Production: Point and Confidence Interval Estimates," Journal of Productivity Analysis, Springer, vol. 20(2), pages 169-190, September.
    11. Bouali Guesmi & Teresa Serra & Amr Radwan & José María Gil, 2018. "Efficiency of Egyptian organic agriculture: A local maximum likelihood approach," Agribusiness, John Wiley & Sons, Ltd., vol. 34(2), pages 441-455, March.
    12. Bouali Guesmi & Teresa Serra & Allen Featherstone, 2015. "Technical efficiency of Kansas arable crop farms: a local maximum likelihood approach," Agricultural Economics, International Association of Agricultural Economists, vol. 46(6), pages 703-713, November.
    13. Pantzios, Christos J. & Rozakis, Stelios & Tzouvelekas, Vangelis, 2006. "Evading Farm Support Reduction via Efficient Input Use: The Case of Greek Cotton Growers," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 38(3), pages 555-574, December.
    14. Mark Andor & Frederik Hesse, "undated". "The StoNED age: The Departure Into a New Era of Efficiency Analysis? An MC study Comparing StoNED and the "Oldies" (SFA and DEA)," Working Papers 201285, Institute of Spatial and Housing Economics, Munster Universitary.
    15. Isabel Narbón-Perpiñá & Maria Teresa Balaguer-Coll & Marko Petrović & Emili Tortosa-Ausina, 2020. "Which estimator to measure local governments’ cost efficiency? The case of Spanish municipalities," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 11(1), pages 51-82, March.
    16. Lajos Baráth & Imre Fertő & Štefan Bojnec, 2018. "Are farms in less favored areas less efficient?," Agricultural Economics, International Association of Agricultural Economists, vol. 49(1), pages 3-12, January.
    17. Rajendran, Srinivasulu, 2014. "Technical Efficiency of Fruit and Vegetable Producers in Tamil Nadu, India: A Stochastic Frontier Approach," Asian Journal of Agriculture and Development, Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), vol. 11(1), pages 1-17, June.
    18. Ruhul Salim & Amzad Hossain, 2006. "Market deregulation, trade liberalization and productive efficiency in Bangladesh agriculture: an empirical analysis," Applied Economics, Taylor & Francis Journals, vol. 38(21), pages 2567-2580.
    19. Kaffash, Sepideh & Azizi, Roza & Huang, Ying & Zhu, Joe, 2020. "A survey of data envelopment analysis applications in the insurance industry 1993–2018," European Journal of Operational Research, Elsevier, vol. 284(3), pages 801-813.
    20. Головань С.В. & Назин В.В. & Пересецкий А.А., 2010. "Непараметрические Оценки Эффективности Российских Банков," Журнал Экономика и математические методы (ЭММ), Центральный Экономико-Математический Институт (ЦЭМИ), vol. 46(3), июль.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:applec:45:y:2013:i:7:p:839-847. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEC20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.