2004
DOI: 10.1111/j.1574-0862.2004.tb00192.x
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Technical efficiency and farm size: a conditional analysis

Abstract: The relationship between technical efficiency and size might be affected by farm heterogeneity. We analyse this relationship conditional on a set of control variables. These control variables are chosen using a production model where technical efficiency is introduced as a parameter. As a result, technical efficiency affects both the input demand and the output supply of a profit maximising producer. The empirical application explores these issues using panel data of dairy farms in Spain.

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Cited by 152 publications
(66 citation statements)
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References 29 publications
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“…These findings are consistent with earlier observations by Jovanovic (1982), Kalaitzandonakes et al (1992), Sharma et al (1999), Lundvall and Battese (2000), and Alvarez and Arias (2004), who have all reported a positive relation between average total productivity and farm size. The utilization of some production factors such as labor, for example, often does not increase in a linear form with the farm size.…”
Section: Discussionsupporting
confidence: 83%
“…These findings are consistent with earlier observations by Jovanovic (1982), Kalaitzandonakes et al (1992), Sharma et al (1999), Lundvall and Battese (2000), and Alvarez and Arias (2004), who have all reported a positive relation between average total productivity and farm size. The utilization of some production factors such as labor, for example, often does not increase in a linear form with the farm size.…”
Section: Discussionsupporting
confidence: 83%
“…The Risk aversion index was constructed by Principal Component Analysis and measures risk aversion on the basis of self-assessment questions and preferences of hypothetical yield scenarios that vary in the level and variability of yields. 6 We included Cultivated area as a potential efficiency determinant, for whose effect there exists conflicting evidence in the literature (Alvarez and Arias 2004). Since, ceteris paribus, farmers with very limited land resources may have incentives to increase yields through meticulous crop and input management, we expect an inverse relationship with TE.…”
Section: Model Specificationmentioning
confidence: 99%
“…The purpose of DEA linear programming approach is to minimize in a multiple-output model the used multiple-input in each farm or unit of production, that is simply a ratio of efficiency between the variable input (x ijo ) and produced output (y rjo ) and u r, ,v i are the weights to assess the solution of the efficiency problem, written in a mathematical model as (Coelli et al, 2005): max h = Σ r u r y rjo /Σ i v i x ijo (1) h is the minimizing of multiple-input model or the maximization of produced output in the multiple-output method. s.t.…”
Section: Methodsmentioning
confidence: 99%
“…Usually, the poorer is the agricultural area and farm size the lower is the level of efficiency and farmer's income (Lund and Hill, 1979;Alvarez and Arias, 2004;Galluzzo, 2013). Despite this conceptual theoretical framework, other authors in some European countries have pointed out as small farms, due to a simplified traditional organization and management of cropping system, have had better results in terms of technical and economic efficiency than large farms and corporate agrarian enterprises (Gorton and Davidova, 2004); hence, the farm size impacts partially on the level of technical efficiency (Nowak et al, 2015;Galluzzo, 2013;.…”
Section: Introductionmentioning
confidence: 99%