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Scale Efficiency in the New Zealand Dairy Industry: a Non‐parametric Approach
Author(s) -
Jaforullah Mohammad,
Whiteman John
Publication year - 1999
Publication title -
australian journal of agricultural and resource economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.683
H-Index - 49
eISSN - 1467-8489
pISSN - 1364-985X
DOI - 10.1111/1467-8489.00093
Subject(s) - data envelopment analysis , scale (ratio) , hectare , herd , sample (material) , agricultural science , sample size determination , dairy industry , agricultural economics , mathematics , statistics , econometrics , economics , environmental science , geography , zoology , agriculture , biology , chemistry , cartography , archaeology , food science , chromatography
The aim in this article is to measure the scale efficiency of the New Zealand dairy industry and to examine the relationship between farm size and technical efficiency. Data envelopment analysis (DEA) is applied to a sample of 264 dairy farms. The results suggest that 19 per cent of these farms are operating at optimal scale, 28 per cent at above optimal scale, and 53 per cent at below optimal scale. On average, the optimal size for New Zealand dairy farms is estimated at 83 hectares with a herd of 260 animals. Average technical efficiency is estimated at 89 per cent.