@article{Ghebremariam:31706,
      recid = {31706},
      author = {Ghebremariam, W.K. and Ortmann, Gerald F. and Nsahlai,  I.V.},
      title = {A production function analysis of commercial dairy farms  in the Highlands of Eritrea using ridge regression},
      journal = {Agrekon},
      address = {2006-06},
      number = {346-2016-15928},
      pages = {18},
      year = {2006},
      abstract = {This study presents a production function analysis of  fresh milk production in the Highlands of Eritrea, where  most dairy farmers in Eritrea are located. To ensure  representative production functions, this region was  divided into three relatively homogenous study areas,  namely Central Zone, Mendefera and Dekemhare. Most data for  the study were collected in a survey of 120 respondents  using a structured questionnaire. To obviate the problem of  multicollinearity among explainatory variables, ridge  regression was used to estimate milk production functions  for each study area. Production elasticities of variable  inputs, marginal products (MPx), values of marginal  products (VMPx), marginal rates of input substitution (MRS)  and least-cost combinations of purchased concentrates and  forage were estimated for the three regions. The VMPs of  all inputs for Central Zone dairy farmer respondents were  estimated to be greater than their input prices, implying  that the resources were under-utilized from a  profit-maximising perspective (i.e. where VMPx = Px).  However, respondents in Mendefera and Dekemhare used  concentrates in excess of optimum levels (i.e. VMPx<Px).  Analysis of the least-cost combination of purchased  concentrates and forage suggests that dairy farmer  respondents were also not allocating these resources on a  minimum-cost basis. However, the profit maximizing and  least-cost criteria assume perfect knowledge, a risk-free  environment and competitive markets. Improved information,  farmer training and better infrastructure (roads and  telecommunications) to promote competitive markets could  help to enhance resource allocation decisions by dairy  producers.},
      url = {http://ageconsearch.umn.edu/record/31706},
      doi = {https://doi.org/10.22004/ag.econ.31706},
}