Comer solutions in duality models: A cross-section analysis of dairy production decisions

Robert D. Weaver, Daniel A. Lass

Research output: Contribution to journalArticle

9 Scopus citations

Abstract

Comer solutions are often observed in cross-section samples of farm-level production decisions. An estimation strategy is presented and applied to a uniquely comprehensive data set for Pennsylvania dairy farms. A complete set of choice functions is derived consistent with multiple outputs and multiple inputs, expected profit maximation, and the existence of comer solutions with respect to the labor hiring decision. Results illustrate that substantial estimation bias may occur if the existence of comer solutions is not recognized. Estimated elasticities of choices with respect to input and net output prices indicate substantial responsiveness of choice to price. Results indicate that changes in education and acreage operated result in substantial changes in output and input mixes and that the differences in results for farms, with and without hired labor, are substantial.

Original languageEnglish (US)
Pages (from-to)1025-1040
Number of pages16
JournalAmerican Journal of Agricultural Economics
Volume71
Issue number4
DOIs
StatePublished - Nov 1989

All Science Journal Classification (ASJC) codes

  • Agricultural and Biological Sciences (miscellaneous)
  • Economics and Econometrics

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