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Indivisible And Spatial Components Of Dairy Firm Efficiency

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  • Dalton, Timothy J.

Abstract

This paper contrasts nonparametric data envelopment analysis (DEA) and free disposal hull (FDH) representations of dairy technology to determine whether factor indivisibilities and firm-specific location components affect economic performance. Location and capital structure variables, in addition to technology and firm structure, are used in a second-stage model to explain firm inefficiency using a Tobit estimator. Capital structure and location factors are correlated with firm efficiency in the DEA models but not the FDH indicating that the FDH representation may account for these factors in the in the first-stage efficiency modeling. Results indicate that failing to control for firm-specific spatial constraints and capital divisibilities will bias inefficiency estimates and overestimate the potential gains to economic policy designed to improve firm performance.

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  • Dalton, Timothy J., 2004. "Indivisible And Spatial Components Of Dairy Firm Efficiency," 2004 Annual meeting, August 1-4, Denver, CO 20320, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea04:20320
    DOI: 10.22004/ag.econ.20320
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    Cited by:

    1. Vecdi DEMIRCAN & Turan BINICI & Carl R. ZULAUF, 2010. "Assessing pure technical efficiency of dairy farms in Turkey," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 56(3), pages 141-148.
    2. Ali Al-Sharafat, 2013. "Technical Efficiency of Dairy Farms: A Stochastic Frontier Application on Dairy Farms in Jordan," Journal of Agricultural Science, Canadian Center of Science and Education, vol. 5(3), pages 1-45, February.
    3. Wilson, Paul W., 2018. "Dimension reduction in nonparametric models of production," European Journal of Operational Research, Elsevier, vol. 267(1), pages 349-367.
    4. Bassam Aldeseit, 2013. "Measurement of Scale Efficiency in Dairy Farms: Data Envelopment Analysis (DEA) Approach," Journal of Agricultural Science, Canadian Center of Science and Education, vol. 5(9), pages 1-37, August.

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