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Rationalising inefficiency in dairy production: evidence from an over-time approach

Addisu Adamie, Birhanu and Hansson, Helena (2022). Rationalising inefficiency in dairy production: evidence from an over-time approach. European Review of Agricultural Economics. 49 :2 , 433-471
[Research article]

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Abstract

We argue that inefficiency can be part of a strategic self-repositioning adjustment process beyond the general interpretation of poor performance. Based on the rational inefficiency hypothesis, we examine the simultaneous dynamics of efficiency and animal welfare improving investments over time in dairy farms. Using rotating panel data from Swedish dairy farms and implementing multidirectional efficiency analysis and Markov transitional dynamic analysis, the paper provides evidence that for some farms inefficiency is temporary and part of rational decision along their trajectory towards multi-efficiency (high efficiency-high animal welfare). The findings show the importance of time dynamics in efficiency achievements with implications to cross-sectional view.

Authors/Creators:Addisu Adamie, Birhanu and Hansson, Helena
Title:Rationalising inefficiency in dairy production: evidence from an over-time approach
Series Name/Journal:European Review of Agricultural Economics
Year of publishing :2022
Volume:49
Number:2
Page range:433-471
Number of Pages:39
ISSN:0165-1587
Language:English
Publication Type:Research article
Article category:Scientific peer reviewed
Version:Published version
Copyright:Creative Commons: Attribution 4.0
Full Text Status:Public
Subjects:(A) Swedish standard research categories 2011 > 5 Social Sciences > 502 Economics and Business > Economics
Keywords:rational inefficiency, Markov transitional dynamics, dairy farming, multidirectional efficiency analysis
URN:NBN:urn:nbn:se:slu:epsilon-p-111251
Permanent URL:
http://urn.kb.se/resolve?urn=urn:nbn:se:slu:epsilon-p-111251
Additional ID:
Type of IDID
DOI10.1093/erae/jbaa034
ID Code:27730
Faculty:NJ - Fakulteten för naturresurser och jordbruksvetenskap
Department:(NL, NJ) > Dept. of Economics
Deposited By: SLUpub Connector
Deposited On:06 May 2022 12:25
Metadata Last Modified:06 May 2022 12:31

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