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Input usage, output mix and industry deregulation: an analysis of the Australian dairy manufacturing industry

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  • Balcombe, Kelvin George
  • Doucouliagos, Hristos
  • Fraser, Iain

Abstract

In this paper we estimate a Translog output distance function for a balanced panel of state level data for the Australian dairy processing sector. We estimate a fixed effects specification employing Bayesian methods, with and without the imposition of monotonicity and curvature restrictions. Our results indicate that Tasmania and Victoria are the most technically efficient states with New South Wales being the least efficient. The imposition of theoretical restrictions marginally affects the results especially with respect to estimates of technical change and industry deregulation. Importantly, our bias estimates show changes in both input use and output mix that result from deregulation. Specifically, we find that deregulation has positively biased the production of butter, cheese and powders.

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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): 51 (2007)
Issue (Month): 2 (June)
Pages:

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Handle: RePEc:ags:aareaj:118324

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Related research

Keywords: Bayesian; deregulation; output distance function; Agribusiness;

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References

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  5. Doucouliagos, Hristos & Hone, Phillip, 2000. "Deregulation and Subequilibrium in the Australian Dairy Processing Industry," The Economic Record, The Economic Society of Australia, vol. 76(233), pages 152-62, June.
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  8. Coelli, Tim & Perelman, Sergio, 1999. "A comparison of parametric and non-parametric distance functions: With application to European railways," European Journal of Operational Research, Elsevier, vol. 117(2), pages 326-339, September.
  9. Kompas, Tom & Che, Tuong Nhu, 2004. "Productivity in the Australian Dairy Industry," Australasian Agribusiness Review, University of Melbourne, Melbourne School of Land and Environment, vol. 12.
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  23. Watson, Alistair S., 2005. "Productivity and the Dairy Industry," Australasian Agribusiness Review, University of Melbourne, Melbourne School of Land and Environment, vol. 13.
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Cited by:
  1. Johannes Sauer, 2010. "Deregulation and dairy production systems: a Bayesian distance function approach," Journal of Productivity Analysis, Springer, vol. 34(3), pages 213-237, December.
  2. Rebecca Summary & William Weber, 2012. "Grade inflation or productivity growth? An analysis of changing grade distributions at a regional university," Journal of Productivity Analysis, Springer, vol. 38(1), pages 95-107, August.

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