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Research Article
Hog Production and Agglomeration Economies: The Case of
U.S. State-Level Hog Production
*Gibson Nene1 and Karina Schoengold2
1Assistant Professor, Department of Economics, University of Minnesota Duluth.
2Associate Professor, Department of Agricultural Economics and School of Natural Resources, University of Nebraska-
Lincoln.
The study examines the importance of agglomeration economies on U.S. hog production for the
period, 1994-2006. Results suggest that hog production in a state is positively affected by hog
production in a nearby state, confirming the presence of agglomeration economies at the sate-
level. This finding is true for both the top 22 hog producing states and for hog production in the
Midwest region of the U.S. Agglomeration economies played an important role in the
reorganization of the U.S. hog industry during the study period. In addition to agglomeration
economies, our results also show that environmental regulations, hog price, land value, labor
cost and the cost of corn input were important in shaping the U.S. hog industry during the study
period.
Key words: U.S. hog industry, Agglomeration economies, Hog production, Geographical concentration, Midwest
JEL Classifications: L22, L25
INTRODUCTION
The U.S. hog production industry went through several concentrated at the national level and within states.
changes and has become more geographically Herath, Weersink, and Carpentier (2005a), making use of
concentrated since the mid-1990s (Hubbell and Welsh, the Gini coefficient to measure concentration, confirmed
1998; Herath, Weersink, and Carpentier, 2005a; Azzam, that hog production is becoming more concentrated within
Nene and Schoengold, 2015). The industry which has states. The changes associated with the hog industry
experienced a huge decline in small hog farms, is now becoming more geographically concentrated have led to a
dominated by low cost large specialized farms (McBride non-uniform interregional distribution of hogs (Hubbell and
and Key, 2003; Kaus, 2019). We believe that the recent Welsh, 1998). The geographical concentration of hog
reorganization of the hog industry could be, in part, due to farms can have several lasting effects. Specifically, the
spillover benefits (agglomeration economies) across changes in the hog production industry could: affect
states. In this study we examine the importance of communities with changes in hog production levels; affect
agglomeration economies across states on the U.S. hog local supply and demand for key inputs and output; alter
industry after controlling for factors that have been found the economic base of communities; change the utilization
to be important in shaping the reorganization of an animal of industry-specific infrastructure and services; and
production industry in prior studies. Our findings show that concentrate nutrients from animal manure in fewer
hog production in a state is positively affected by hog locations causing adverse environmental consequences
production in a nearby state, supporting the argument that (Roe, Irwin, and Sharp, 2002).
agglomeration economies played an important role in the
reorganization of the U.S. hog industry during the period of
the study.
Hubbell and Welsh (1998) provided one of the earliest *Corresponding Author: Gibson Nene, Department of
studies to formally address geographical concentration in Economics, University of Minnesota Duluth.
the hog industry. Based on Theil’s entropy index, showed Email: gnene@d.umn.edu, Tel: 218 726 7864
that hog production is becoming more geographically Co-Author Email: kschoengold2@unl.edu
Hog Production and Agglomeration Economies: The Case of U.S. State-Level Hog Production
Nene and Schoengold 664
The reorganization of an industry has been found to be economies by making use of the spatial lag serves two
affected by several factors including those internal to the distinct purposes; firstly, it corrects spatial autocorrelation
firm; factors external to the firm but internal to the industry; through the dependent variable and secondly, this variable
and factors external to both the firm and the industry. captures whether agglomeration economies are present or
Eberts and McMillen (1999) noted that firm-internal scale not. The study by Roe, Irwin and Sharp (2002) is based on
economies, industry internal scale economies (external a cross-section of counties for the years 1992 and 1997.
economies to the firm), urbanization economies (external Based on a cross-section of counties using 1997 data, the
to both the firm and the industry), transportation costs, and study finds that the presence of other swine farms has a
environmental regulations are important factors affecting positive effect on the inventory of hogs in a particular
firm location. The U.S. hog industry is not unique, such county. The study also found that hog production in one
factors were found to be important to the U.S. hog industry county to be negatively correlated with hog production in a
by Roe, Irwin, and Sharp (2002) for the year 1997 and nearby county.
between the years1992 and 1997. Agglomeration
economies are economies external to the farm but internal The study by Roe, Irwin and Sharp (2002) is, however,
to the hog production sector. In this study, agglomeration limited in that it addresses the importance of
economies are defined in the context of localization agglomeration economies over a single year, 1997, and
economies as all the benefits that accrue to hog production between two years, 1992 and 1997. Their findings that
in one state as a result of hog production in a nearby state. agglomeration economies existed in the hog industry in the
Such spillovers are likely to arise because the presence of year 1997 and that such economies did not exist between
other hog feeding operations facilitates a local, industry- 1992 and 1997, do not capture the importance of
specific infrastructure of service individuals and agglomeration economies over time. Sorting out the true
information, which enhances the performance of each effects as they exist and whether they have persisted or
operation through reduced transaction costs and improved changed over time is important to fully understand such
diffusion of production, financial and marketing information effects (Dean,Brown and Stango, 2000).
(Eberts and McMillen, 1999).
We believe that the importance of agglomeration
These factors are more than likely to have played an economies and regulation in hog production is not likely to
important role in the reorganization of U.S. hog production remain the same over time as such spillovers are likely to
within and across states witnessed over the past two change due to several factors including changes in the
decades. Easy access to factors of production plays an stability of the economy stemming from recessions,
important role on a farmer’s decision on whether or not to depressions or booms. Economic hardships may disrupt
operate a hog operation facility in a particular state. The or change the institutions central to the diffusion of
variation of input costs may lead to variations in input use production, marketing and financial information forcing
through time. Because such fluctuations are inevitable, farmers to go out of business. While the foregoing studies
the cost of the factors of production will pose a great have been useful in the understanding of issues in U.S.
challenge to existing and potential hog producers. hog production, to our knowledge, no study has
Because one of the main reasons why farmers engage in investigated the importance of agglomeration economies
hog production is to make a profit, the attractiveness of the on U.S. hog production by making use of panel data at the
market plays an important role in determining whether to state level and the possibility of spatial dependence that
engage in hog production in a particular location or not. stems from omitted variables that are related to each other
High market prices will more than likely attract more over space. The current study fills this gap.
farmers to engage in hog production. Environmental
regulations in the hog industry played important role in the Our study will make use of panel data from top 22 U.S.
reorganization of the U.S. hog industry since the 1990s. major hog producing states to address the importance of
Several studies found evidence that environmental agglomeration economies while controlling for the factors
regulations have slowed down U.S. hog production that have been found to be important in shaping the
(Metcalfe, 2001; Roe, Irwin and Sharp, 2002; Kuo, 2005; organization of an industry such as input availability,
and Herath, Weersink, and Carpentier, 2005b; Azzam, market attractiveness, and environmental regulations.
Nene and Schoengold, 2015; Kaus, 2019) showed Because most of the top hog producing states are in the
environmental regulations have an impact on the structure Midwest, our study also examines the presence or
of the U.S. hog industry. absence of agglomeration economies in the Midwest
states. To address this problem, we make use of a simple
While the U.S. hog industry has received wide research profit maximization model for a theoretical framework. The
attention in recent years, the importance of agglomeration empirical analysis is based on three alternative models;
economies on U.S. hog production has received limited ordinary least squares (OLS), two-stage least squares-
attention with mixed results. To the best of our knowledge, spatial lag model (2SLS-SLM) and generalized method of
only a single study by Roe, Irwin and Sharp (2002) moments-spatial autoregressive (GMM-SAR). Results
addressed the importance of agglomeration economies on from the three alternative models are then used to
U.S. hog production. Accounting for agglomeration determine the model that best fits the data. While the
Hog Production and Agglomeration Economies: The Case of U.S. State-Level Hog Production
J. Agric. Econ. Rural Devel. 665
effects of the other factors can be examined using all three was proposed by Ord (1975), and has been popular
models, agglomeration economies can only be examined since.
using the 2SLS-SLM model. Our study also tests for spatial
autocorrelation through the error term using the GMM- The models in equations (1) and (2) if specified in a single
SAR model. A review of spatial models is presented next. model, the combined model is called the spatial
autoregressive model with autoregressive disturbances
(Kelijian and Prucha, 1998). This model is specified as
REVIEW OF SPATIAL MODELS follows:
Cross-sectional models that assume that the dependent
variable corresponding to each cross-sectional unit
y = Wy + X +
depends, in part, on a weighted average of that dependent = M + Equation (3),
variable corresponding to neighboring cross-sectional
units are called spatial autoregressive models (Anselin, ~ N (0, I n )2
1988). This weighted average is called a spatial lag of the where y is the n x 1 vector of observations on the
dependent variable. The spatially lagged dependent
variable is usually correlated with the error term rendering dependent variable, X is the n x k matrix of observations
the ordinary least squares estimator inconsistent, (Ord, on k exogenous variables, W and M are n x n spatial
1975; Anselin, 1988; Anselin and Bera, 1998).
weighting matrices of known constants, is the k x 1
The standard spatial autoregressive model also known as
vector of regression parameters, and are scalar
the spatial lag model (SLM) is defined as follows: autoregressive parameters , is the n x 1 vector of
y = Wy + X +
disturbances, and is a nx1 vector of innovations. If we let
, | | 1 Equation (1), = 0 , the model in equation (3) reduces to the model
~ N (0, 2 I n )
where y is the n x 1 vector of observations on the represented in equation (1), and when = 0 the model
collapses into the model in equation (2). When = = 0
dependent variable, X is the n x k matrix of observations
, then there is no presence of spatial correlation in the
on k exogenous variables, W is an n x n spatial weighting spatial autoregressive model with autoregressive
matrix of known constants, is the k x 1 vector of disturbances.
regression parameters, is a scalar autoregressive
parameter , and is the n x 1 vector of disturbances.
A generalized spatial two-stage least squares (GS2SLS)
procedure for estimating the spatial autoregressive model
with autoregressive disturbances was developed by
If the researcher believes that the spatial dependence Kelijian and Prucha (1998). The GS2SLS model allows for
stems from omitted variables that are related to each other the possibility that the spatial weight matrix associated with
over space, the spatial autoregressive (SAR) model, is the error term and that associated with the dependent
employed. The SAR model is specified as follows: variable is the same, that is, M = W . The GS2SLS
approach is a three-step procedure. In the first step the
y = X + regression model in equation (3) is estimated by two-stage
= W + ,| | 1 Equation (2), least squares (2SLS) using instruments.
The instrument matrices used are a subset of the linearly
~ N (0, 2 I n ) independent columns of, (𝑋, 𝑊𝑋, 𝑊 2 𝑋, . . . , 𝑀𝑋, 𝑀𝑊𝑋, 𝑀𝑊 2 𝑋),
where is the n x 1 vector of disturbances, is the
where the subset contains the linearly independent
columns of ( XM , X ) . The autoregressive parameter, ρ,
autoregressive parameter and
is the n x 1 vector of is estimated by generalized method of moments (GMM)
innovations. The rest of the parameters in the SAR model procedure suggested by Kelijian and Prucha (1998) in the
are as defined in the model in (1). Kelijian and Prucha second stage. The GMM estimation procedure yields a
(1999) proposed a “generalized” moments (GMM) consistent estimator of ρ, whether or not the weight
approach for the estimation of the spatial autoregressive matrices for the dependent variable and the error term are
parameter, , which was found to be as efficient as the equal (Kelijian and Prucha, 1998). The third step, involves
standard maximum likelihood estimator which was the a 2SLS re-estimation of the model in (3) after transforming
popular method used prior to the GMM approach. The the model using a Cochrane-Orcutt type transformation to
(quasi) maximum likelihood and the moments estimator of account for spatial correlation as follows:
Hog Production and Agglomeration Economies: The Case of U.S. State-Level Hog Production
Nene and Schoengold 666
First, equation (3) is rewritten as follows: Solving the above system of first-order conditions provides
y = Z + the following input or factor demand functions:
= W +
Equation (4), C * = C ( p, wC , wL , wN , wT , wE )
where Z = ( X , Wy) and = ( ' , )' . The Cochrane- L* = L( p, wC , wL , wN , wT , wE )
Orcutt type transformation to this model yields:
N * = N ( p, wC , wL , wN , wT , wE ) Equation (8)
y * = Z * + Equation (5), T * = T ( p, wC , wL , wN , wT , wE )
where y * = y − Wy
and Z = Z − WZ . In sum, the
*
E * = E ( p, wC , wL , wN , wT , wE )
foregoing spatial models presented in equations (1), (2),
and (3) are the popularly used models in spatial By plugging in the input demand functions back into the
econometrics today. The outline of our theoretical model is profit function yields the indirect profit function given by:
presented next. * = ( p, wC , wL , wN , wT , wE ) Equation (9)
The usual properties of the profit function are assumed to
THEORETICAL MODEL hold. The profit function is assumed to be homogenous of
degree one in output and input prices. The partial
For our theoretical model, we present a simple profit derivative of the indirect profit function with respect to the
maximization model applied to hog production. Hog *
production is assumed to utilize land, feed, labor, output price, = y 0 . This inequality satisfies the
transportation, and the environment as inputs. The
p
production function associated with hog production is property that the profit function is non-decreasing in output
price. The partial derivatives of the indirect profit function
therefore given by: y = f (C, L, N , T , E ) , where y , C
with respect to input prices are negative by the envelope
, L , N , T and E represent the quantity of output, the *
quantity of corn feed, the quantity of land, the theorem, that is, = −i * 0 , for 𝑖 = 𝐶, 𝐿, 𝑁, 𝑇 and 𝐸.
transportation input and the quantity of the environmental wi
input, respectively. The environment is treated as an input
in this model because hog producers incur a cost to utilize By Hotelling’s Lemma, we can derive the optimal hog
the environment in disposing of hog waste including supply function for hogs from the indirect profit function
manure. The production of hogs is costly, and the total cost
*
of production is given by given in equation (9), i.e. = y * . The hog supply
V = wC C + wL L + wN N + wT T + wE E p
function is a function of the output price and all input prices.
where, V , wC , w L , wN , wT and wE represent total cost, We can write the hog supply function as follows:
hog price, price of feed, price of labor, price of land,
transportation cost and environmental cost, respectively. y * = y( p, wC , wL , wN , wT , wE ) . Equation (10)
The firm’s profit maximization problem in each state is
given by: The effect of environmental costs on hog production will
be captured by how environmental stringency affects hog
max = py − wC C − wL L − wN N − wT T − wE E supply. Given that we model environmental regulations as
C , L , N ,T , E
an input in the production of hogs, it follows that the
Equation (6)
comparative statics results of this effect on profit and the
Solving the problem above yields the following first order * y *
optimal hog supply are given by 0 , and 0,
conditions: wE wE
pf C − v wC = 0 respectively. This stems from one of the properties of the
pf L − v wL = 0 profit and supply functions that they are non-increasing in
input prices. In Section 4 we present an empirical model
pf N − v wN = 0 Equation (7) that estimates the optimal supply function. Given the
above comparative static results, theory predicts that the
pf E − v wE = 0 effect of environmental regulations on hog production is
negative.
pfT − v wT = 0
Hog Production and Agglomeration Economies: The Case of U.S. State-Level Hog Production
J. Agric. Econ. Rural Devel. 667
producers are willing to supply.
disturbances, and is the nt x 1 vector of innovations. For
the spatial weighting matrix, we use a standardized first- To capture the cost of farm labor in hog production, we
order spatial contiguity matrix. We assign a “1” for states use farm labor wages. Specifically we use the average
that share a common border and a “0” for states that do hourly state-level wages as a proxy for farm labor wages.
not share a common border. Notice that a state cannot be Metcalfe (2001), and Herath, Weersink, and Carpentier
its own neighbor, henceforth; the elements on the main (2005b) also used farm labor wages to capture the cost of
diagonal of the first-order contiguity matrix are all set to farm labor input. A negative sign on this variable is
zero. The spatial weight matrix is standardized by expected, that is, the higher the farm labor cost, the lower
normalizing so that row sums add to unity (LeSage, 1997). the number of hogs hog producers are willing to supply.
Several studies including Pan and LeSage (1995) and Land price captures the cost of land input in hog
LeSage (1997), have used the first-order contiguity matrix production. We use farm land price to capture land input
in spatial econometrics. cost in the same manner as in Metcalfe (2001), and
Herath, Weersink, and Carpentier (2005b). We expect the
The menu of spatial models considered in this study is coefficient on the land price variable to be negative. A
given below: negative sign shows that hog farmers supply fewer hogs
as the price of land input goes up. Transportation cost
Hog Production and Agglomeration Economies: The Case of U.S. State-Level Hog Production
Nene and Schoengold 668
reflects the cost of transport input in hog production. We variable in the same manner as in Roe, Irwin and Sharp
capture transportation cost using the price of unleaded (2002). A positive (negative) and statistically significant
gas. Energy price is a popular proxy for transportation cost sign on the spatial lag variable suggests the presence
in studies in livestock industry studies as well as (absence) of agglomeration economies in the hog industry.
meatpacking industry studies, e.g. Azzam (1997). Metcalfe A positive or a negative sign is expected. The scalar
(2001) and Herath, Weersink, and Carpentier (2005b) autoregressive parameter, , is used to capture spatial
used the price of gas as a proxy for transportation cost in dependence through the error term. While this is not a
hog related studies. A negative sign is expected for this parameter of interest, if ignored when spatial
variable since it is a cost of an input in the hog production autocorrelation exists through the error term, our results
process. will be inconsistent. Data sources and units of study are
presented next.
For the environmental index variable, we make use of a
time series of qualitative environmental stringency indices
constructed in the same manner as in Metcalfe (2000). DATA
Qualitative environmental stringency indices have been
widely used in hog industry studies (Metcalfe, 2001; Roe, The study uses data for 22 major U.S. hog producing
Irwin, and Sharp, 2002; Herath, Weersink, and Carpentier, states for the years 1994 through 2006. The period of the
2005b; Azzam, Nene and Schoengold, 2015). Specifically, study is limited by the availability of environmental
we construct the indices for the years 2003 to 2006, and regulation stringency index data which is only available
we combine these with indices constructed in prior studies from 1994 to 2006. We also estimate regressions for the
(Metcalfe ,2000; and Herath, Weersink, and Carpentier, 22 top U.S. hog producing states and for the Midwest hog
2005b), to complete the 1994-2006 time series for each of producing states. We separate the Midwest states from the
the top 22 hog producing states. rest of the 22 states for several reasons. First, spatial
dependence in the Midwest is likely to be different from the
Because stringency indices used in prior studies are based spatial dependence we observe when all the 22 states are
on different measures and judgments, we make use of the considered. Secondly, the Midwest states account for
method employed by Herath, Weersink, and Carpentier most of the corn production in the U.S. which is a major
(2005b), to go around the problem of different stringency input in hog production, and thirdly, the Midwest states
indices that exist in the literature. The methodology uses include eight of the top 10 U.S. hog producing states;
the ratio of the state value divided by the mean of the Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota,
state’s regulation stringency for the period in the sample. Missouri, Nebraska, and Ohio. The top 10 U.S. hog
If the value of this ratio is greater than 1, equals 1 and is producing states account for about 85% of total U.S. hog
less than 1, that state has above average, average and production. The 22 hog producing states and the Midwest
below average stringency level, respectively. This is one hog producing states are shown in Table 1 below.
way to make the different stringency measures
comparable. Environmental stringency is endogenous in Table 1. Units of study
our model because regulations may increase in states that Unit of
are experiencing increasing hog production while states study States
with low environmental regulations may realize increased
22 major Arkansas, Colorado, Georgia, Illinois,
hog production (Metcalfe, 2001). Predicted values of the
producing Indiana, Iowa, Kansas, Kentucky, Michigan,
environmental stringency measure are used in order to
states Minnesota, Missouri, Nebraska, North
take care of this endogeneity. A negative sign is expected
Carolina ,Ohio, Oklahoma, Pennsylvania,
y * South Dakota, Tennessee, Texas, Utah,
on this variable as suggested by theory, 0 , as it
wE Virginia, and Wisconsin
Midwest Illinois, Indiana, Iowa, Kansas, Michigan,
enters the hog production as an input. Specifically, in this states Minnesota, Missouri, Nebraska, Ohio,
model the indices reflect an environmental regulation South Dakota, and Wisconsin
compliance cost. Arkansas, Colorado, Georgia, Kentucky,
North Carolina , Oklahoma, Tennessee,
Spatial lag ( ) is used as a proxy for agglomeration Texas, Utah, and Virginia
economies. Specifically, this variable captures spatial
autocorrelation thorough the dependent variable which we The data sources and description, and the descriptive
call agglomeration economies in this study. We define this statistics are given in Tables 2, and 3, respectively.
Hog Production and Agglomeration Economies: The Case of U.S. State-Level Hog Production
J. Agric. Econ. Rural Devel. 669
EMPIRICAL RESULTS AND DISCUSSION check. Results for the top 22 hog producing states, and
Midwest hog producing states, are given in Tables 4, and
We examine the importance of agglomeration economies 5, respectively. Table 4 below provides results for the 22
on the hog industry on all the top 22 hog producing states major hog producing states based on three different
and on the Midwest hog producing states for robustness models, namely; 2SLS-SLM, GMM-SAR and OLS.
Table 4. Results for the 22 major hog producing states
2 SLS -S LM GMM-SAR OLS
Variable Coefficient T-ratio Coefficient T-ratio Coefficient T-ratio
Constant -73.50 -6.44*** -93.83 -7.48*** -115.83 -9.51***
Index -58.50 -7.75*** -70.34 -8.86*** -86.77 -10.78***
Hog price 20.04 3.86*** 25.19 4.60*** 33.77 5.89***
Corn price -33.81 -6.68*** -39.86 -7.57*** -49.14 -8.88***
Transport -1.66 -0.64 -3.20 -1.21 -8.00 -2.77***
Labor 31.47 4.08*** 47.99 5.53*** 64.21 7.97***
Land 7.23 6.43*** 8.18 6.82*** 9.22 7.30***
0.57 10.41***
0.37 0.09
Note for Table 4: The dependent variable is the state-level percentage share of total U.S. hog production. P values are
indicated as ***0.01, **0.05 and *0.10.
The 2SLS-SLM results in Table 4 show that the coefficient conclude that the model that best explains our data is the
of is positive and statistically significant while the 2SLS-SLM.
coefficient of is positive and statistically insignificant. Based on the 2SLS-SLM results, the coefficients on hog
Based on the GMM-SAR model results, we reject the null price, corn price, and transport have the expected signs.
hypothesis that spatial autocorrelation through the error The coefficient on hog price suggests that hog production
term exists at the state-level. Since there is evidence of increased with an increase in the price of hogs. The
positive spatial autocorrelation, the OLS model results are
unbiased but inefficient (Anselin, 1988). We therefore
Hog Production and Agglomeration Economies: The Case of U.S. State-Level Hog Production
Nene and Schoengold 670
coefficients on corn price and transport suggest that high statistically significant coefficient on suggests that
prices of these factors of production serve to deter hog production in a state is positively affected by hog
production in the 22 major hog producing states. The production in a nearby state, confirming the existence of
coefficients on labor and land have unexpected positive agglomeration economies in the U.S. hog industry. The
and statistically significant signs. The coefficient on labor coefficient on index is negative and statistically significant.
suggests that the presence of a large pool of labor or This result suggests that environmental regulation has a
relatively low farm labor wages serve to attract hog negative effect on hog production. Results for the Midwest
production. The positive coefficient on land suggests that hog producing states in Table 5 below also show that the
land values are favorable for hog production probably due best model for the data is the 2SLS-SLM.
to the availability of vast farming land. The positive and
Results in Table 6 show that agglomeration economies are states are considered. This difference could be due to the
stronger for the 22 major hog producing states when fact that the non-Midwestern states do benefit a lot from
compared to Midwest hog producing states. This suggests being close to Midwestern states as they do not have the
that hog production in a state is more positively related to large supplies of corn that Midwestern states have and
that of a neighboring state, when the 22 major producing other well-established infrastructure tailored for hog
Hog Production and Agglomeration Economies: The Case of U.S. State-Level Hog Production
J. Agric. Econ. Rural Devel. 671
production. In general, results confirm that agglomeration Policy makers in one state should consider working with
economies play a major role in U.S. hog production policy makers neighboring states in order to come up with
regardless of the region being considered. The presence policies which are mutually beneficial for hog production in
of agglomeration economies across states shows that hog order to make it easy for hog producers in different states
production across states benefits from hog industry- to take advantage of agglomeration economies through
specific infrastructure of service individuals and ease access to inputs, information sharing, diffusion of
information. This in turn enhances the performance of production, reduced transaction costs, and knowledge
each hog production operation through reduced spillovers, among others. An area for further investigation
transaction costs and improved diffusion of production, would be trying to answer the question: Is environmental
financial and marketing information. Results on the effect regulation in a state influenced by regulation in nearby
of the cost of factors of production on the U.S. hog states? States may consider regulation in nearby state as
production industry suggest that: transport cost has no a way to reduce the time cost of coming up with new
effect on hog production; land value and labor cost have a regulations or to make their regulation more stringent than
positive effect on hog production; and the cost of corn input those of nearby states for political reasons.
has a negative effect on hog production for the 22 major
hog producing states, and the Midwest hog producing
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Economics Letters, 47, 137-142. medium, provided the original author and source are cited.
Hog Production and Agglomeration Economies: The Case of U.S. State-Level Hog Production