Hostname: page-component-78c5997874-mlc7c Total loading time: 0 Render date: 2024-11-11T00:14:04.108Z Has data issue: false hasContentIssue false
  • English
  • Français

The Technical Efficiency of Illinois Grain Farms: An Application of a Ray-Homothetic Production Function

Published online by Cambridge University Press:  28 April 2015

Hassan Y. Aly ,
Krishna Belbase ,
Richard Grabowski  and
Steven Kraft
Hassan Y. Aly
Affiliation:
Alexandria University, Egypt
Krishna Belbase
Affiliation:
Department of Agricultural Economics, Cornell University
Richard Grabowski
Affiliation:
Department of Economics, Southern Illinois University
Steven Kraft
Affiliation:
Department of Agribusiness Economics, Southern Illinois University
Get access Rights & Permissions [Opens in a new window]

Abstract

The purpose of this paper is to measure the extent of technical inefficiency among a sample of Illinois grain farms using the corrected ordinary least squares method. Instead of assuming a Cobb-Douglas production function, a linear form of the ray-homothetic is used. The results show a significant amount of technical inefficiency among all the farms in the sample, but with large farms being less technically inefficient than small farms.

Keywords

technical efficiencyIllinois grain farmsray-homothetic
Type
Submitted Articles
Information
Journal of Agricultural and Applied Economics , Volume 19 , Issue 1 , July 1987 , pp. 69 - 78
Copyright
Copyright © Southern Agricultural Economics Association 1987

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Afrait, S. “Efficiency Estimation of Production Functions.” Int. Econ. Rev., 13(1972):568–598.CrossRefGoogle Scholar
Aigner, D. J., and Chu, S. F. “On Estimating the Industry Production Function.” Amer. Econ. Rev., 58(1968):826–839.Google Scholar
Aigner, D. J., Lovell, C. A. K., and Schmidt, P. J. “Formulation and Estimation of Stochastic Production Function Models.” J. Econometrics, 6(1977):21–37.Google Scholar
Bagi, F. S.“The Relationship Between Farm Size and Technical Efficiency in West Tennessee Agriculture.” So. J. Agr. Econ., 14(1982):139–144.Google Scholar
Carr, B. “A Profile of the Commercial Agricultural Sector” in Farm, Structure: A Historical Perspective on the Changes in the Number and Size of Farms. Committee Print, Senate Committee on Agriculture, Nutrition, and Forestry, 96th Congress, Second Session. Washington: U. S. Government Printing Office 1980, pp. 24–35.Google Scholar
Eichhorn, W. “Eine Verallgemeinerung des Begriffs der Homogen Produktionsfunktion.” Unternehmensforschung, 13(1969):99–109.Google Scholar
Färe, R., Grosskopf, S., and Lovell, C.A.K.. Measurement of Efficiency of Production. Boston:Kluwer Nijhoff, 1985.Google Scholar
Färe, R., Jansson, L., and Lovell, C.A.K. “Modeling Scale Economies with Ray-Homothetic Production Functions.” Rev. of Econ. Stat, 47 (1985):624–629.Google Scholar
Färe, R., and Yoon, B.. “Returns to Scale in U.S. Surface Mining of Coal.” Resources and Energy, 7(1985):341–352.Google Scholar
Farrell, M. J.“The Measurement of Productive Efficiency.” Royal Stat. Assoc. 120, Series A— General (1957):253–281.Google Scholar
Feder, G., Just, R. E., and Zilberman, D.. “Adoption of Agricultural Innovations in Developing Countries: A Survey.” Economic Development and Cultural Change, 33(1985):255–298.Google Scholar
Førsund, F. R., and Hjalmarsson, L.. “Frontier Production Functions and Technical Progress: A Study of General Milk Processing and Swedish Dairy Plants.” Econometrica, 47(1979):893–900.Google Scholar
Førsund, F. R., and Jansen, E. S. “On Estimating Average and Best Practice Homothetic Production Functions via Cost Functions.” Int. Econ. Rev., 18(1977):463–476.CrossRefGoogle Scholar
Førsund, F. R., Lovell, C. A. K., and Schmidt, P.. “A Survey of Frontier Production Functions and of Their Relationship to Efficiency Measurement.” J. Econometrics, 13(1980):5–25.Google Scholar
Greene, W. H.“On Estimation of a Flexible Frontier Production Model.” J. Econometrics, 13(1980):101–115.Google Scholar
Hall, B., and Leveen, E. P. “Farm Size and Economic Efficiency: The Case of California.” Amer. J. Agri. Econ., 60(1978):589–600.Google Scholar
Huang, C. J.“Estimation of Stochastic Frontier Production Function and Technical Inefficiency via the EM Algorithm.” Southern Econ. J., 50(1984):847–856.Google Scholar
Lin, W., Coffman, G., and Penn, J. B. U.S. Farm Numbers, Size, and Related Structural Dimensions: Projections to Year 2000. ESCS, Technical Bulletin No. 1625. Washington: U.S. Department of Agriculture, 1980.Google Scholar
Meeusen, W., and van den Broeck, J.. “Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error.” Int. Econ. Rev., 18(1977):435–444.Google Scholar
Miller, T. “Economics of Size and Other Growth Incentives” in Structural Issues of American Agriculture. ESCS Agricultural Economic Report 438. Washington: U.S. Department of Agriculture, 1979.Google Scholar
Pindyck, R., and Rubinfeld, D.. Econometric Models and Economic Forecasts. New York: McGraw-Hill Book Co., 1981.Google Scholar
Richmond, J. “Estimating the Efficiency of Production.” Int. Econ. Rev., 15(1974):515–521.Google Scholar
Russell, N. P., and Young, T.. “Frontier Production Functions and the Measurement of Technical Efficiency.” J. Agri. Econ., 34(1983):139–150.CrossRefGoogle Scholar
Schmidt, P., and Lovell, C. A. K. “Estimating Stochastic Production and Cost Frontiers When Technical and Allocative Inefficiency are Correlated.” J. Econometrics, 13(1980):83–100.Google Scholar
Shephard, R. W. Cost and Production Functions. Princeton: Princeton University Press, 1953.Google Scholar
Shweder, T. “Some ‘Optimal’ Methods to Detect Structural Shift or Outliers in Regression.” Journal of the American Statistical Association, 71(1976):491–501.Google Scholar
Wilkins, D.F., Kesler, R.P., Cagley, C.E., and Chow, I.. 1982 58th Annual Summary of Illinois Farm Business Records. Coop. Ext. Ser. Cir. 1214. Urbana, Ill.: College of Agriculture, University of Illinois, 1983.Google Scholar