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Doctoral thesis, 2018

Essays on pig production efficiency and farmers' financial decisions under uncertainty

Labajova, Katarina


Recent structural changes in agricultural production towards fewer, but larger, units pose challenges for farmers in decision making about practical production and about managerial practices to increase efficiency, which are vital for farm productivity and profitability. In studies using mathematical programming and econometric models, this thesis evaluated farm-specific characteristics related to the individual technical efficiency (TE) of each input and output factor and of managerial characteristics associated with persistent TE (PTE) and residual TE (RTE). Regarding farm-specific variables, the results indicated that advisory services, farm location and most housing practices were not significant for technical efficiency, with the exception of recent technology such as heated floors. Use of written instructions on feeding and in preventing infectious diseases was associated with higher technical efficiency. For the best results, decision makers should use separate approaches depending on pig production specialisation and the input or output efficiency requiring improvement. Regarding managerial practices, managerial experience, economy-driven goals and use of strategic management accounting practices were drivers of PTE. In contrast, conducting bookkeeping checks more frequently and focusing on meeting market demands in terms of quality were negatively associated with PTE. Joint time significance evaluation of lagged individual technical efficiency on variables of structural change in the regression model confirmed the long-term nature of investments in Swedish pig farming. Under uncertainty, decisions made by farmers may be biased, producing suboptimal solutions. For example, illusion of control can give a sense of controlling power in situations where the outcome is determined by chance. Alternative ways to collate and analyse data are needed to evaluate behaviours under uncertainty. Presence of illusion of control in farmers’ financial decisions was explored in a study with a framed economic experimental design, survey data and a psychological scale. The results did not indicate the presence of illusion of control in the sample of Swedish farmers studied. The outcome measures showed low levels of correlation, suggesting that different methods and measurement instruments are complements, rather than substitutes. Findings provide information that could help farmers in their complex production and managerial decisions.


behavioural finance, data envelopment analysis, framed field economic experiments, multidirectional efficiency analysis, risk and uncertainty, stochastic frontier, structural change, Swedish pig industry, technical efficiency

Published in

Acta Universitatis Agriculturae Sueciae
2018, number: 2018:37
ISBN: 978-91-7760-214-9, eISBN: 978-91-7760-215-6
Publisher: Department of Economics, Swedish University of Agricultural Sciences.

Authors' information

Labajova, Katarina
Swedish University of Agricultural Sciences, Department of Economics

UKÄ Subject classification

Agricultural Science
Business Administration

URI (permanent link to this page)