A Comparison of Production Technology Using Primal and Dual Approaches: The Case of Dutch Dairy Farms.

Two models of profit-maximizing farms are developed using the duality that exists between the normalized profit function and the production function. Some production factors are fixed in the short term. The specification used is the translog form with variable intercepts. The equations are estimated with an incomplete panel using a SUR and 3SLS estimation method. The theoretical framework fits the data well. Assumptions often made about the production technology are tested. Linear homogeneity and Hicks' neutrality are rejected by both models. The production and substitution elasticities calculated by both models do not differ significantly. Therefore, using data from dairy farms in the Netherlands the dual models perform similarly. Copyright 1992 by Oxford University Press.