Efficiency measures for retail fertilizer dealers

Paul V. Preckel, Jay T. Akridge, Michael A. Boland

Research output: Contribution to journalArticlepeer-review

4 Scopus citations

Abstract

An application of tests of economically rational behavior by fertilizer retailers is presented. Tests are developed to measure efficiency of variable cost minimization, revenue maximization, and profit maximization. These tests include standard linear programming-based nonparametric efficiency tests and simpler but less conclusive tests which are performed using only simple arithmetic. Results indicate that fertilizer retailers act as variable cost minimizers, but not as revenue and profit maximizers. Additional tests isolate whether inefficiency in cost minimization is due to a perception of variable input fixity. Management can then take steps to focus efforts on input control.

Original languageEnglish (US)
Pages (from-to)497-509
Number of pages13
JournalAgribusiness
Volume13
Issue number5
DOIs
StatePublished - Sep 1997

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