Analysis of Technical Efficiency of U.S. Dairy Farms and Federal Government Programs

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Abstract

In this paper technical efficiency of dairy farms is estimated using two alternative methods: data envelopment analysis and stochastic frontier analysis. Both methods provided identical ranking of states based on technical efficiency (TE) scores. Further, logistic regression is applied to TE scores to explain how known technical and policy variables affect farm’s probability of being efficient. Results of this study have shown that overall dairy farms have high TE and that there is a potential for improvement. Periodic analysis and evaluation of TE is recommended, and based on the outcomes revised production and support policies drafted.
Original languageEnglish
Pages (from-to)839-847
JournalApplied Economics
StatePublished - 2013

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