Premium
Dynamic Area Allocation and Economies of Scale and Scope
Author(s) -
Lansink Alfons Oude,
Stefanou Spiro
Publication year - 2001
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.1477-9552.2001.tb00937.x
Subject(s) - scope (computer science) , economies of scale , incentive , economies of scope , economics , scale (ratio) , cash , sample (material) , microeconomics , production (economics) , macroeconomics , computer science , geography , chemistry , cartography , chromatography , programming language
This article applies the adjustment cost framework to the case of area allocation by simultaneously determining the levels of input demand and output supply. Dynamic measures of economies of scale and scope are defined for output‐specific areas. An application to a rotating sample of Dutch cash crops reveals that farmers have a strong incentive for specialisation, but that large adjustment costs for area allocation resulting in small adjustments toward the optimal level prevent them from doing so.