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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.

Suggested Citation

  • Fraser, Iain & Hone, Phillip, 2001. "Farm-level efficiency and productivity measurement using panel data: wool production in south-west Victoria," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 45(2), pages 1-18.
    • Handle: RePEc:ags:aareaj:117390
    DOI: 10.22004/ag.econ.117390
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    References listed on IDEAS

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    Cited by:

    1. Watson, Alistair S., 2005. "Productivity and the Dairy Industry," Australasian Agribusiness Review, University of Melbourne, Department of Agriculture and Food Systems, vol. 13.
    2. I. Fraser & W. Horrace, 2003. "Technical Efficiency of Australian Wool Production: Point and Confidence Interval Estimates," Journal of Productivity Analysis, Springer, vol. 20(2), pages 169-190, September.
    3. Gelan, Ayele & Muriithi, Beatrice W., 2015. "Examining Returns to Scale in Smallholder Dairy Farms in East Africa," Quarterly Journal of International Agriculture, Humboldt-Universitaat zu Berlin, vol. 54(3), pages 1-23, September.
    4. 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), pages 1-15.
    5. Villano, Renato A. & Fleming, Euan M. & Farrell, Terence C. & Fleming, Pauline, 2006. "Productivity Change in the Australian Sheep Industry Revisited," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25593, International Association of Agricultural Economists.
    6. Ronan, Glenn, 2002. "Delving and Divining for Australian Farm Management Agenda: 1970-2010," Australasian Agribusiness Review, University of Melbourne, Department of Agriculture and Food Systems, vol. 10, pages 1-24, September.
    7. Ronan, Glenn, 2002. "Delving and Divining for Australian Farm Management Agenda: 1970-2010," 2002 Conference (46th), February 13-15, 2002, Canberra, Australia 174039, Australian Agricultural and Resource Economics Society.
    8. Ahmed, Osama & Abdel-Salam, Sameh & Rungsuriyawiboon, Supawat, 2020. "Measuring the economic performance of mixed crop-livestock farming systems in Egypt: A non-parametric DEA approach," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 19(2), pages 133-145.
    9. 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, Australia 125109, Australian Agricultural and Resource Economics Society.
    10. 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, Department of Agriculture and Food Systems, vol. 14.
    11. Karanja, Francis & Gilmour, Daniel & Fraser, Iain, 2012. "Dairy productivity growth, efficiency change and technological progress in Victoria," 2012 Conference (56th), February 7-10, 2012, Fremantle, Australia 125053, Australian Agricultural and Resource Economics Society.

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