Technical efficiency and size: The case of Illinois grain farms

Abstract

In this paper the relative productive performance of a sample of Illinois grain farms was gauged using Farrell-type measures of technical efficiency. Mathematical programming methods were used to envelop the data to form a multiple output, multiple input technology relative to which the performance of individual farms was assessed. Using a decomposition of those measures developed by Fare, Grosskopfand Lovell, it was found that the major source of inefficiency was deviation from most productive size of the large farms in the sample.