Work

On the Opportunity Cost of Crop Diversification

Year: 2018

Type: article

Abstract: Distance functions are increasingly being augmented, with environmental goods treated as conventional outputs. A common approach to evaluate the opportunity cost of providing an environmental good is the exploitation of the distance function's dual relationship to the value function. This implies that the opportunity cost is assumed to be non‐negative. This approach also requires a convex technology set. Focusing on crop diversification for a balanced sample of 44 cereal farms in the East of England for the years 2007–2013, this paper develops a novel opportunity cost measure that does not depend on these strong assumptions. We find that the opportunity cost of crop diversification is negative for most farms.

Source: Journal of Agricultural Economics

DOI: 10.1111/1477-9552.12272

Authors: Frederic Ang, Simon M. Mortimer, Francisco J. Areal, Richard Tiffin

Institution: Wageningen University & Research

Language: English

Topic: Efficiency Analysis Using DEA

Subfield: Management Science and Operations Research

Field: Decision Sciences

Domain: Social Sciences

SDG: Zero hunger

Open Access status: green

Funder: Department for Environment, Food and Rural Affairs, UK Government