The shortage of labor has become an urgent problem for the farming industry for decades. This paper aims to investigate the contribution of labor to agricultural production efficiency in the tree nut industry. A discussion of marginal rate of technical substitution and economies of scale will also be included. The stochastic production frontier model is applied to a survey data collected from tree nut growers in Butte County, California. Results indicate labor input is not significant in deciding farm production and efficiency. Improving the logistics of input management and the quality of labor would be a better solution for the agriculture sector in managing the labor shortage problems.
Key words: stochastic production frontier, labor efficiency, tree nut industry
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