Economics

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Prairie Swine Centre is an affiliate of the University of Saskatchewan


Prairie Swine Centre is grateful for the assistance of the George Morris Centre in developing the economics portion of Pork Insight.

Financial support for the Enterprise Model Project and Pork Insight has been provided by:



Author(s): Li Yu, Terrance Hurley, James Kliebenstein, Peter Orazem
Publication Date: January 1, 2008
Reference: Iowa State University Department of Economics Working Papers Series # 08026
Country: USA

Summary:

This study develops and applies a tractable methodology that can show
how technologies complement or substitute for each other, information that is critical to
understanding the effect of technical innovation on industry growth and structure. Our findings suggest that the complementarity among technologies in large bundles is contributing to a form of returns to scale that is leading to increasing growth in average farm size. Because the technologies are complementary, the productivity of one technology is enhanced by the adoption of the other technologies. This provides an incentive for multiple technology adoption, but not all farms are equally able to adopt. We find that large farms run by younger and more educated operators are the most likely to adopt multiple technologies. This apparent size bias for multiple technologies is consistent with the view that new technologies are hastening the move toward larger farms in the U.S. pork industry.

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