Scale efficiency in the New Zealand dairy industry: a non-parametric approach

Mohammad Jaforullah, John Whiteman

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    Abstract

    The aim in this article is to measure the scale efficiency of the New Zealand dairy industry and to examine the relationship between farm size and technical efficiency. Data envelopment analysis (DEA) is applied to a sample of 264 dairy farms. The results suggest that 19 per cent of these farms are operating at optimal scale, 28 per cent at above optimal scale, and 53 per cent at below optimal scale. On average, the optimal size for New Zealand dairy farms is estimated at 83 hectares with a herd of 260 animals. Average technical efficiency is estimated at 89 per cent.
    Original languageEnglish
    Pages (from-to)523-542
    Number of pages20
    JournalAustralian Journal of Agricultural and Resource Economics
    Volume43
    Issue number4
    DOIs
    Publication statusPublished - Dec 1999

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