A production function highly concave in inputs will have a dual profit function less convex in prices. Even large variations in prices will cause little variation in input usage and output, resulting in poor profit function estimates. This is demonstrated using Monte Carlo simulation with...

Agricultural production estimates have often differentiated and estimated different technologies within a sample of farms. The common approach is to use observable farm characteristics to split the sample into groups and subsequently estimate different functions for each group. Alternatively,...

We use DEA (Data Envelopment Analysis) techniques to determine if measured inefficiencies are caused by a missing management input. We replace the quantity of operators’ labor with estimates of the value of labor and management, and then with net farm income from the previous year, to...

Simulation of nonparametric efficiency shows that even when the number of firms is large, defining ten or more inputs results in most firms being efficient. Comparison of empirical with simulated results suggests that the dimension of the problem rather than actual efficiencies has the greater...