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Deregulation and Productivity – Empirical Evidence on Dairy Production

Author

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  • Frick, Fabian
  • Sauer, Johannes
Abstract
We investigate productivity development and its relation to resource reallocation effects in the dairy sector in southeast Germany during the phasing-out of the European Union milk quota. We use a farm level dataset containing financial accounting data for a period of 15 years. Farm-level productivity is estimated by applying a proxy approach recently introduced in the literature. We compare this approach to other estimation approaches as well as an index based analysis. After aggregation we decompose sector productivity into unweighted mean productivity and a covariance term measuring the allocation of resources toward more productive farms. We observe an increase in the covariance term coinciding with a period of rather volatile milk prices. Therefore, we hypothesize that reallocation of production resources due to market deregulation is triggered or even enforced by extreme price levels. We seek to find support for this hypothesis by a regression analysis linking the measure for the potential covariance between resource reallocation and productivity on the one hand and price variability on the other. In this analysis we find some empirical evidence for this hypothesis.

Suggested Citation

  • Frick, Fabian & Sauer, Johannes, 2016. "Deregulation and Productivity – Empirical Evidence on Dairy Production," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236032, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea16:236032
    DOI: 10.22004/ag.econ.236032
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    Cited by:

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    2. Martini, Bruno Guilherme & Helfer, Gilson Augusto & Barbosa, Jorge Luis Victória & Modolo, Regina Célia Espinosa & da Silva, Marcio Rosa & de Figueiredo, Rodrigo Marques, 2020. "Prediction and Context Awareness in Agriculture: A Systematic Mapping," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 12(3), September.
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    5. Walenty Poczta & Joanna Średzińska & Maciej Chenczke, 2020. "Economic Situation of Dairy Farms in Identified Clusters of European Union Countries," Agriculture, MDPI, vol. 10(4), pages 1-22, March.
    6. Adamides, George, 2020. "Heuristic Evaluation of the User Interface for a Semi-Autonomous Agricultural Robot Sprayer," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 12(3), September.
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    11. Žáková Kroupová, Zdeňka & Hálová, Pavlína & Rumánková, Lenka, 2020. "Productivity of Czech Milk Production in European Comparison," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 10(3), September.
    12. Ibe, Rebecca & Rahji, Mohammed & Adeoti, Adetola & Adenegan, Kemisola, 2020. "Household Demand for Fruits and Vegetables in Rural and Urban South-Western Nigeria," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 12(3), September.
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    Agricultural and Food Policy; Productivity Analysis;

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