The Technical Efficiency of Illinois Grain Farms: an Application of a Ray-homothetic Production Function

trend towards farm consolidation, it is also imThe purpose of this paper is to measure the portant to know if large farms are more techextent of technical inefficiency among a nically efficient than smaller ones. Finally, it sample of Illinois grain farms using the corshould be noted that the method developed rected ordinary least squares method. Instead here can be easily applied to farm data for of assuming a Cobb-Douglas production funcother regions, different crops, etc. tion, a linear form of the ray-homothetic is The second section of this paper presents a used. The results show a significant amount of brief review of the literature concerning the technical inefficiency among all the farms in measurement of technical efficiency and disthe sample, but with large farms being less cusses the methodology used. Section three technically inefficient than small farms. discusses the data and the empirical results. Section four summarizes the paper.