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MEASUREMENT AND EXPLANATION OF TECHNICAL EFFICIENCY IN MISSOURI HOG PRODUCTION

Ben-Belhassen, Boubaker and Abner W. Womack

No 21819, 2000 Annual meeting, July 30-August 2, Tampa, FL from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: The U.S. live hog production has undergone a significant structural change characterized by a trend toward larger operations. Experts argue that there is a cost advantage for larger farms due to industrialization and increased management intensity. One important element in production, mainly for industries with rapid consolidation, is technical efficiency which affects the firm's competitive position directly. This study uses a stochastic production frontier function and farm-level data to measure and explain technical efficiency in Missouri hog production. The study estimates the mean technical efficiency for farms in the sample at about 82 percent, implying that a large proportion of production (18%) is lost due to farm-specific inefficiencies. Further, the results of the technical efficiency model proves the effects of technology and managerial skills on the level of productive efficiency. The study also finds economies of scale in hog production, thus explaining the consolidation in the industry.

Keywords: Industrial Organization; Livestock Production/Industries; Productivity Analysis (search for similar items in EconPapers)
Date: 2000
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea00:21819

DOI: 10.22004/ag.econ.21819

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