Corner Solutions in Duality Models: A Cross-Section Analysis of Dairy Production Decisions

Robert Weaver and Daniel A. Lass

American Journal of Agricultural Economics, 1989, vol. 71, issue 4, 1025-1040

Abstract: Corner solutions are often observed in cross-section samples of farm-level production decisions. An estimation strategy is presented and applied to a uniquely comprehensive data set for Pennsylvania dairy farms. A complete set of choice functions is derived consistent with multiple outputs and multiple inputs, expected profit maximation, and the existence of corner solutions with respect to the labor hiring decision. Results illustrate that substantial estimation bias may occur if the existence of corner solutions is not recognized. Estimated elasticities of choices with respect to input and net output prices indicate substantial responsiveness of choice to price. Results indicate that changes in education and acreage operated result in substantial changes in output and input mixes and that the differences in results for farms, with and without hired labor, are substantial.

Date: 1989
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://hdl.handle.net/10.2307/1242679 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Corner Solutions in Duality Models: A Cross—Section Analysis of Dairy Production Decisions (1984)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:ajagec:v:71:y:1989:i:4:p:1025-1040.

Access Statistics for this article

American Journal of Agricultural Economics is currently edited by Madhu Khanna, Brian E. Roe, James Vercammen and JunJie Wu

More articles in American Journal of Agricultural Economics from Agricultural and Applied Economics Association Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press ().