Reducing non-allocative costs on Danish dairy farms: application of non-parametric methods

TY - JOUR

T1 - Reducing non-allocative costs on Danish dairy farms

T2 - application of non-parametric methods

AU - Lund, Mogens

AU - Jacobsen, Brian H.

AU - Hansen, Lars C.E.

PY - 1993

Y1 - 1993

N2 - Non-allocative costs for 248 Danish dairy farms are evaluated against the ‘best management practice’ using Farrell-type efficiency ratings. The average potential cost saving is estimated to 134, 800 kr., or 19% of the total non-allocative costs per dairy farm. The findings suggest that pure cost inefficiencies are far more important for dairy farms than inefficiencies due to sub-optimal farm size. Non-proportional reductions are shown to be as important as reductions due to scale economies. The paper closes with a discussion of the implications for farm policy and management practice.

AB - Non-allocative costs for 248 Danish dairy farms are evaluated against the ‘best management practice’ using Farrell-type efficiency ratings. The average potential cost saving is estimated to 134, 800 kr., or 19% of the total non-allocative costs per dairy farm. The findings suggest that pure cost inefficiencies are far more important for dairy farms than inefficiencies due to sub-optimal farm size. Non-proportional reductions are shown to be as important as reductions due to scale economies. The paper closes with a discussion of the implications for farm policy and management practice.

KW - EFFICIENCY

KW - NONPARAMETRIC METHODS

KW - NON-ALLOCATIVE COSTS

KW - FIXED COSTS

KW - DAIRY FARMS

U2 - 10.1093/erae/20.3.327

DO - 10.1093/erae/20.3.327

M3 - Journal article

SN - 0165-1587

VL - 20

SP - 327

EP - 341

JO - European Review of Agricultural Economics

JF - European Review of Agricultural Economics

IS - 3

ER -