ABSTRACT
Cost of production (COP) studies invariably suffer from two important limitations. First, everyone wants costs of production (COP) information, but few people are willing to produce COP estimates. Secondly, almost everyone who does produce COP estimates has their own unique method of calculating them. This chapter addresses three simple questions that help explain the diversity of models and collection techniques. They are what is the question/problem? what is the relevant model? what is the most appropriate data collection technique? The bottom up approach typically features budget generators and/or Delphi panels in constructing costs by starting at the very lowest activity level and building up costs based on detailed "recipes". The top down models are more positive in nature with fewer implicit assumptions. Accrual whole-farm accounting data are likely to be more reliable and cheaper to collect than bottom up data. However, the problem with top down Data is that enterprise allocation procedures tend to be unreliable.
