Somatic cell counts, reproduction indicators, and technical efficiency in milk production: A stochastic frontier analysis for Spanish dairy farms.

Health and reproductive conditions affect milk yields in dairy cows and may lead to differences in technical efficiency across farms. To investigate this, we created a novel panel data set of 197 dairy farms in northern Spain observed over the period 2006-2014 by combining information from 2 different sources and including data on production variables, somatic cell count, and reproduction indicators, as well as a genetic index. We used these data to estimate a stochastic production frontier where the somatic cell count, age at first calving, and calving interval are included as determinants of technical efficiency. Higher somatic cell count, greater age at first calving, and longer calving intervals were found to decrease technical efficiency, translating into significant losses in profits which we quantify through a simulation exercise. We also quantified the effect of genetic selection on profits, taking into account not only its direct effect on productivity but also its indirect effect through reduced technical efficiency due to the effect of genetic selection on the health and reproduction variables.

Reserve capacity of public and private hospitals in response to demand uncertainty.

A feature of hospitals is that they face uncertain demand for the services they offer. To cover fluctuations in demand, they need to maintain reserve service capacity in the form of beds, equipment, personnel, etc. to minimize the probability of excess queuing or turning away patients, creating a trade-off between reserve service capacity and economic costs. Using a simple theoretical framework, we show how the reserve capacity established depends on institutional characteristics that can affect the objective of the hospital. In particular, we show that private and public hospitals may provide different levels of reserve capacity. In an empirical application using a panel data set of Spanish hospitals over the period 1996-2006, we model reserve service capacity using a distance frontier approach. Our results show that private hospitals generally react to a lesser extent to demand uncertainty than public hospitals.

The contribution of resident physicians to hospital productivity.

Resident physicians play a double role in hospital activity. They participate in medical practices and thus, on the one hand, they should be considered as an input. Also, they are medical staff in training and, on the other hand, must be considered as an output. The net effect on hospital activities should therefore be empirically determined. Additionally, when considering their role as active physicians, a natural hypothesis is that resident physicians are not more productive than senior ones. This is a property that standard logarithmic production functions (including Cobb-Douglas and Translog functional forms) cannot verify for the whole technology set. Our main contribution is the development of a Translog modification, which implies the definition of the input "doctors" as a weighted sum of senior and resident physicians, where the weights are estimated from the empirical application. This modification of the standard Translog is able, under suitable parameter restrictions, to verify our main hypothesis across the whole technology set while determining if the net effect of resident physicians in hospitals' production should be associated to an output or to an input. We estimate the resulting output distance function frontier with a sample of Spanish hospitals. Our findings show that the overall contribution of resident physicians to hospitals' production allows considering them as an input in most cases. In particular, their average productivity is around 37% of that corresponding to senior physicians.

Value-Creating Strategies in Dairy Farm Entrepreneurship: A Case Study in Northern Spain.

This paper explores different value-creating strategies (VCS) used by dairy farmers engaged in on-farm diversification ventures. In order to explicitly identify the informal strategies followed by 49 farmers in their value-added ventures, we applied a theoretically informed business model framework combining three dimensions: value proposition linked to local food, customer engagement via quality schemes and shorter supply chains, and the key capabilities of the entrepreneur. Using cluster analysis, four different types of VCS were identified and labelled as 'Ecological', 'Single-product', 'Innovative', and 'Traditional'. Whilst we found that these strategies are influenced by contextual factors and the owner's entrepreneurial skills, in general, we did not observe significant differences in performance between them. The results suggest that farmers respond entrepreneurially to sectorial changes adopting those VCS that tend to align with their entrepreneurial capabilities and context, thus enabling them to succeed with any of the strategies pursued. Hence, our work contributes towards clarifying the relationship between VCS, entrepreneurial capabilities, and context. This is important for farmers and policymakers because it reveals the diversity of farm management and the resilience of farm systems. As a result, the potential challenges for Single-product VCS and Traditional VCS are discussed.