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Finite Mixture Estimation of Size Economies and Cost Frontiers in the Face of Multiple Production Technologies

Published online by Cambridge University Press:  28 April 2015

H. Arlen Smith  and
C. Robert Taylor
H. Arlen Smith
Affiliation:
College of Agriculture, Auburn University
C. Robert Taylor
Affiliation:
College of Agriculture, Auburn University
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Abstract

Finite mixture estimation (FME) is compared to estimated generalized least squares (EGLS) in the estimation of economies of size and production cost frontiers for Alabama dairy farms. FME provides several unique insights into the economic forces behind recent changes in Alabama's dairy industry. FME provides estimation of a stochastic average cost frontier with known statistical properties, which it was not otherwise possible to obtain using available stochastic frontier estimation packages.

Keywords

dairyeconomies of sizefinite mixture estimationstochastic cost frontier
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 30 , Issue 2 , December 1998 , pp. 379 - 388
Copyright
Copyright © Southern Agricultural Economics Association 1998

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