MEASURING SCOPE AND SCALE EFFICIENCY GAINS DUE TO SPECIALIZATION

Using the non-parametric linear programming approach, this study examines overall efficiency gains due to diversification between crop and livestock enterprises for a sample of Kansas farms. Overall efficiency gains were decomposed into scope efficiency gains and scale efficiency gains. Farms with both crops and livestock were found to be less efficient than farms with just crops or just livestock. Operator age, profit margin, and farm size were significantly related to overall efficiency.