Identifying heterogeneous flexibility of dairy farms using a panel smooth transition regression approach

Elodie Letort and Fabienne Femenia

European Review of Agricultural Economics, 2024, vol. 51, issue 1, 185-213

Abstract: Our objective is to identify the individual flexibility of dairy farms, which may be the result of heterogeneous input adjustment costs, based on their observed short-run responses to price variations. For this purpose, we propose an analytical framework based on the panel smooth transition regression model with farm-specific threshold parameters. Our model is estimated using data from a sample of French dairy farms over the period 2007–2018. Our empirical results reveal heterogeneous levels of flexibility for these farms, with the most flexible farms appearing to be more autonomous both financially and in terms of animal feed.

Keywords: dairy farms; short-run flexibility; random parameters; panel smooth transition regression; individual threshold level; input adjustment cost (search for similar items in EconPapers)
Date: 2024
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