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Heterogeneous Technologies as an Answer to Market and Price Risk: The Case of Kosovo

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  • Sauer, Johannes
  • Davidova, Sophia
  • Gorton, Matthew

Abstract

This paper empirically measures the prevalence of heterogeneous technologies in a sample of small-scale agricultural producers as an answer to structural conditions and market risks. Such risks are closely linked to the effects of land fragmentation and the degree of market integration. We use the empirical case of Kosovo as a transition country to investigate the efficiency effects of land fragmentation by simultaneously considering the effects of market integration. Different to previous studies, we assume that land fragmentation and market integration lead to the prevalence of heterogeneous technologies allowing farm households to respond more efficiently to exogenous price and policy shocks given their fragmentation and subsistence situation. The empirical work links the latent class frontier method to the estimation of a directional output distance function. We estimate beside primal technology measures also dual Morishima type elasticities of substitution investigating changes in production decisions based on relative shadow price changes.

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  • Sauer, Johannes & Davidova, Sophia & Gorton, Matthew, 2012. "Heterogeneous Technologies as an Answer to Market and Price Risk: The Case of Kosovo," 123rd Seminar, February 23-24, 2012, Dublin, Ireland 122509, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaa123:122509
    DOI: 10.22004/ag.econ.122509
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    Cited by:

    1. Martinez Cillero, Maria & Breen, James & Thorne, Fiona & Wallace, Michael & Hennessy, Thia, 2016. "Technical efficiency and technology heterogeneity of beef farms: a latent class stochastic frontier approach," 90th Annual Conference, April 4-6, 2016, Warwick University, Coventry, UK 236351, Agricultural Economics Society.
    2. Garcia, Luis & Laepple, Doris & Dillon, Emma & Thorne, Fiona, 2020. "The role of hired labor in transient and persistent technical efficiency on Irish dairy farms," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304395, Agricultural and Applied Economics Association.

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