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THE PRODUCTIVE EFFICIENCY OF US MILK PROCESSING CO‐OPERATIVES
Author(s) -
Ferrier G. D.,
Porter P. K.
Publication year - 1991
Publication title -
journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.157
H-Index - 61
eISSN - 1477-9552
pISSN - 0021-857X
DOI - 10.1111/j.1477-9552.1991.tb00344.x
Subject(s) - frontier , production (economics) , sample (material) , production–possibility frontier , productive efficiency , nonparametric statistics , economics , industrial organization , agriculture , business , microeconomics , econometrics , chemistry , ecology , chromatography , biology , archaeology , history
While co‐operative organisations fare well in agricultural markets in the United States, this paper argues that co‐operatives are theoretically an inherently inferior form of organisation. Empirically, we apply a nonparametric frontier production model to a sample of co‐operative and non‐co‐operative US fluid‐milk processors to determine the relative productive efficiency of these two forms of organisation. Our empirical results support the hypothesis that US milk processing co‐operatives are less efficient than their proprietary counterparts.