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Economies of Scale in the Floriculture Industry

Published online by Cambridge University Press:  28 April 2015

Sara K. Schumacher  and
Thomas L. Marsh
Sara K. Schumacher
Affiliation:
Department of Agricultural Economics, Kansas State University, Manhattan, KS
Thomas L. Marsh
Affiliation:
Department of Agricultural Economics, Kansas State University, Manhattan, KS
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Abstract

This study investigated the cost structure of the floriculture industry in the United States. Economies of scale and input elasticities were estimated with a normalized quadratic cost function. Results suggest that economies of scale exist in the floriculture industry. As producers become large and more automated, they have a cost advantage relative to smaller producers who are producing the same output product mix. The existence of economies of scale suggests that average grower size can increase in the future as growers increase in size to take advantage of cost efficiencies.

Keywords

dualityeconomies of scalefloriculturenonprice variablesQ12C31D20
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 35 , Issue 3 , December 2003 , pp. 497 - 507
Copyright
Copyright © Southern Agricultural Economics Association 2003

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