Agglomeration Effects in Ontario's Dairy Farming. (13th June 2016)

• Record Type: Journal Article
• Authors: Hailu, Getu; James Deaton, B.
• Is Part Of: American journal of agricultural economics. Volume 98:Number 4(2016)
• Page Start: 1055
• Page End: 1073
• Publication Date: 2016-06-13
• Subjects: Agglomeration -- urban proximity -- stochastic distance function -- Ontario -- dairy; Agriculture -- Economic aspects -- Periodicals; Agriculture -- Periodicals; 338.105
• DOI: 10.1093/ajae/aaw041
• Languages: English
• ISSNs: 0002-9092

Abstract

Abstract: This paper examines the agglomeration hypothesis, which states that a firm's productive efficiency is increased by closer proximity to other firms. Using a stochastic input distant function with heteroskedastic inefficiency effects, we find that the density of Ontario dairy farms has a significant positive economic effect on production efficiency. The finding has implications for understanding agricultural firm location and farmer‐led efforts to preserve agricultural farming activities in specific locations.