Profit Maximization as a Management Goal on Southeastern Montana Ranches

While tests of producer rationality defined as conformity to the rules of profit maximization (or a similar postulate) for less developed countries are numerous, such tests for high-income countries are rare. This study investigates the extent of rationality observed in the production behavior of ra...

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Bibliographic Details
Published in:Western Journal of Agricultural Economics 1984-07, Vol.9 (1), p.186-194
Main Authors: Biswas, Basudeb, Lacey, John R., Workman, John P., Siddoway, Francis H.
Format: Article
Language:English
Subjects:
Agricultural economics
Conformity
Correlation coefficients
Elasticity of supply
Livestock
Profit maximization
Ranches
Ranching
Rationality
Reason
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Summary:While tests of producer rationality defined as conformity to the rules of profit maximization (or a similar postulate) for less developed countries are numerous, such tests for high-income countries are rare. This study investigates the extent of rationality observed in the production behavior of ranchers in southeastern Montana. The procedure used is that of Wise, Yotopoulos, and Nugent, based on a profit-maximizing production model. The data were collected by personal interviews for 69 ranchers. Results indicate that profit maximization is a reasonably good postulate for studying the behavior of ranchers, and that various policy measures could, at least tentatively, proceed on that basis.
ISSN:0162-1912
1068-5502
2327-8285