A Study of Economic Efficiency of Utah Dairy Farmers: A System Approach

Subal Kumbhakar, Basudeb Biswas () and DeeVon Bailey

The Review of Economics and Statistics, 1989, vol. 71, issue 4, 595-604

Abstract: This study is primarily concerned with investigating the technical, allocative, and scale inefficiency of owner-operators of dairy farms in Utah. A stochastic production frontier has been applied to analyze these inefficiencies. The results indicate that there is positive association between years of education and productivity of labor and capital. Productivity is also found to be negatively related to off-farm income. Regarding the effects of farm size on efficiency, it is found that large farms are the most efficient of all sizes considered. Separate estimates of technical, allocative, and scale inefficiencies indicate that large and medium-sized farms are technically more efficient than small farms. Large farms, on average, are found to be performing much better than medium-sized and small farms so far as allocative and scale inefficiency are concerned. Copyright 1989 by MIT Press.

Date: 1989
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