Partial Production Functions and the Analysis of Farm-Firm Costs and Efficiency

“Partial production functions” relating output to part of, rather than the entire array of, inputs employed are quite common in the production analysis of the biological subprocess in the farm-firm. This article attempts to outline the framework within which this approach is reconcilable with the accepted theory of the firm. It also traces the derivation of the various cost functions from a set of partial production functions which, under certain conditions, may replace the single comprehensive one. An empirical example demonstrates the usefulness of this approach in relating cost variations to factor intensities or economics of scale which characterize a sub-process rather than the process of production as a whole.