Abstract
We study the cost efficiency of dairy farms operating under two different regulatory regimes. While neo-classical economic theory suggests that farms should maximize their efficiency regardless of their regulatory system, we find that farms operating in a more regulated environment have, on average, a lower cost efficiency. Differences in cost efficiency are primarily explained by allocative decisions—farms in the more regulated environment are overcapitalized and overly reliant on homegrown feed. Efficiency is estimated using bootstrapped data envelopment analysis and a stochastic distance function. We discuss the implications of these results for welfare and policy.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
