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“Small” or “Large” Farm: Some Methodological Considerations
Author(s) -
Doran Howard E.
Publication year - 1985
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1240832
Subject(s) - variable (mathematics) , logistic regression , statistics , division (mathematics) , function (biology) , categorization , econometrics , sample (material) , production (economics) , computer science , variables , logistic distribution , logistic function , estimation , mathematics , economics , artificial intelligence , arithmetic , mathematical analysis , chemistry , management , chromatography , evolutionary biology , biology , macroeconomics
Often the estimation of agricultural production technologies in less developed countries is achieved by dividing the sample arbitrarily into “small” and “large” farms and estimating a separate production function for each group. This is equivalent to including an appropriate dummy variable in a single regression on the whole sample. A modification of this approach is to replace the dummy variable (a step‐function) by either a cumulative normal or logistic function. The parameters of such a “generalized dummy variable” convey valuable information on whether a small‐large categorization is appropriate and, if so, where the division should be made.