DEREGULATION AND PRODUCTIVITY – EMPIRICAL EVIDENCE ON DAIRY PRODUCTION

Fabian Frick and Johannes Sauer

No 244884, 56th Annual Conference, Bonn, Germany, September 28-30, 2016 from German Association of Agricultural Economists (GEWISOLA)

Abstract: We investigate development of productivity and its relation to resource reallocation effects in the dairy sector in South-East Germany during the phase-out of the EU milk quota. We use a dataset containing dairy farm accounting data of 15 years. Farm-level productivity is estimated by applying a proxy approach recently discussed in the literature and compared to other estimation approaches and an index analysis. After aggregation we decompose sector productivity into unweighted mean productivity and a covariance term quantifying the allocation of production resources towards more productive farms. We observe an increase in the covariance term coinciding with a period of rather volatile milk prices. Therefore, we hypothesize that reallocation of production resources are triggered by extreme prices possibly powered by market deregulation. We seek to find support for this hypothesis in a regression analysis linking the covariance term and price variability. However, we find only little support for our hypothesis in this analysis.

Keywords: Agricultural and Food Policy; Production Economics; Productivity Analysis (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-agr, nep-eff and nep-eur
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Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:gewi16:244884

DOI: 10.22004/ag.econ.244884

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