Managerial ability has important implications for farm growth. In this article we first show in a production model that increasing output with a fixed level of managerial ability can lead to a decrease in profits. Next, we discuss the effect that managerial ability has on economies of size. In...

Let u ≥ 0 be technical inefficiency, let z be a set of variables that affect u, and let δ be the parameters of this relationship. The model satisfies the scaling property if u(z, δ) can be written as a scaling function h(z, δ) times a random variable u* that does not depend on z. This...

This paper estimates a multivariate Tobit system of monthly wholesale dairy prices where four prices are lower censored by the dairy price support programme. Using Maximum Simulated Likelihood (MSL) the effects of simulation noise are tested/corrected for and the relevance of estimating...

In this article, we use a stochastic frontier latent class model to estimate the technology of dairy farms according to their degree of intensification. The results are compared with a model which assumes that the technology is common to all farms. The empirical analysis uses data on a balanced...