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Farm-level efficiency and productivity measurement using panel data: wool production in south-west Victoria

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  • Fraser, Iain
  • Hone, Phillip

Abstract

In this article we explore some issues surrounding the use of farm‐level efficiency and productivity estimates for benchmarking studies. Using an eight‐year balanced panel of Victorian wool producers we analyse annual variation between estimates of farm‐level technical efficiency derived using Data Envelopment Analysis and Malmquist estimates of Total Factor Productivity. We find that farms change their relative rank in terms of efficiency across years. Also, unlike aggregate studies of Total Factor Productivity, we find at best erratic and modest growth, a worrying result for this industry. However, caution is needed when interpreting these results, and for that matter, benchmarking analysis as currently practised when using frontier estimation techniques like Data Envelopment Analysis.

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File URL: http://purl.umn.edu/117390
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Bibliographic Info

Article provided by Australian Agricultural and Resource Economics Society in its journal Australian Journal of Agricultural and Resource Economics.

Volume (Year): 45 (2001)
Issue (Month): 2 (June)
Pages:

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Handle: RePEc:ags:aareaj:117390

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Related research

Keywords: Livestock Production/Industries; Productivity Analysis;

References

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  1. Léopold Simar & Paul W. Wilson, 1998. "Sensitivity Analysis of Efficiency Scores: How to Bootstrap in Nonparametric Frontier Models," Management Science, INFORMS, vol. 44(1), pages 49-61, January.
  2. Chambers, Robert G. & Fare, Rolf & Jaenicke, Edward & Lichtenberg, Erik, 1998. "Using dominance in forming bounds on DEA models: The case of experimental agricultural data," Journal of Econometrics, Elsevier, vol. 85(1), pages 189-203, July.
  3. D. L. Neff & P. Garcia & C. H. Nelson, 1993. "Technical Efficiency: A Comparison Of Production Frontier Methods," Journal of Agricultural Economics, Wiley Blackwell, vol. 44(3), pages 479-489.
  4. Kalirajan, K P & Shand, R T, 1999. " Frontier Production Functions and Technical Efficiency Measures," Journal of Economic Surveys, Wiley Blackwell, vol. 13(2), pages 149-72, April.
  5. Fraser, I. & Cordina, D., 1999. "An application of data envelopment analysis to irrigated dairy farms in Northern Victoria, Australia," Agricultural Systems, Elsevier, vol. 59(3), pages 267-282, March.
  6. Ahmad, Munir & Boris E., Bravo-Ureta, 1996. "Technical efficiency measures for dairy farms using panel data: a comparison of alternative model specifications," MPRA Paper 37703, University Library of Munich, Germany.
  7. te Kloot, Jack H. & Anderson, Jock R., 1977. "Estimation Of Technological Change In The Pastoral Zone," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 45(04), December.
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Cited by:
  1. Villano, Renato A. & Fleming, Euan M. & Farrell, Terence C. & Fleming, Pauline, 2006. "Productivity Change in the Australian Sheep Industry Revisited," 2006 Conference (50th), February 8-10, 2006, Sydney, Australia 139921, Australian Agricultural and Resource Economics Society.
  2. Tozer, Peter R. & Villano, Renato, 2013. "Decomposing Productivity and Efficiency among Western Australian Grain Producers," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 38(3), December.
  3. Henderson, Benjamin B. & Kingwell, Ross S., 2001. "An Investigation of the Technical and Allocative Efficiency of Broadacre Farmers," 2002 Conference (46th), February 13-15, 2002, Canberra 125109, Australian Agricultural and Resource Economics Society.
  4. Fraser, Iain & Horrace, William C., 2002. "Technical Efficiency of Australian Wool Production: Point and Confidence Interval Estimates," 2002 Conference (46th), February 13-15, 2002, Canberra 125084, Australian Agricultural and Resource Economics Society.
  5. Karanja, Francis & Gilmour, Daniel & Fraser, Iain, 2012. "Dairy productivity growth, efficiency change and technological progress in Victoria," 2012 Conference (56th), February 7-10, 2012, Freemantle, Australia 125053, Australian Agricultural and Resource Economics Society.
  6. Watson, Alistair S., 2005. "Productivity and the Dairy Industry," Australasian Agribusiness Review, University of Melbourne, Melbourne School of Land and Environment, vol. 13.
  7. Fleming, Euan M. & Farrell, Terence C. & Villano, Renato A. & Fleming, Pauline, 2006. "Is farm benchmarking the new acceptable face of comparative analysis?," Australasian Agribusiness Review, University of Melbourne, Melbourne School of Land and Environment, vol. 14.

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