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Efficiency Measures Using The Ray-Homothetic Function: A Multiperiod Analysis

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  • Neff, David L.
  • Garcia, Philip
  • Hornbaker, Robert H.
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    Abstract

    Recent investigations have provided mixed assessments of farm firm efficiency. This analysis examined the efficiency of a homogeneous sample of central Illinois grain farms over a six-year period. A best-practice frontier was constructed using the ray-homothetic function, which allowed optimal farm output to vary with factor intensity. Efficiency measures were found to increase with temporal aggregation. The ray-homothetic approach was found to attribute high scale inefficiencies to larger sample farms in cases where the factor shares did not vary appreciably across farms. The findings suggest that policy recommendations regarding farm efficiency must be made with care.

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    File URL: http://purl.umn.edu/30053
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    Bibliographic Info

    Article provided by Southern Agricultural Economics Association in its journal Southern Journal of Agricultural Economics.

    Volume (Year): 23 (1991)
    Issue (Month): 02 (December)
    Pages:

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    Handle: RePEc:ags:sojoae:30053

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    Web page: http://www.saea.org/jaae/jaae.htm
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    Keywords: Agribusiness;

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    1. Seale, James M, Jr, 1990. "Estimating Stochastic Frontier Systems with Unbalanced Panel Data: The Case of Floor Tile Manufactories in Egypt," Journal of Applied Econometrics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 5(1), pages 59-74, January-M.
    2. Battese, George E. & Coelli, Tim J., 1988. "Prediction of firm-level technical efficiencies with a generalized frontier production function and panel data," Journal of Econometrics, Elsevier, Elsevier, vol. 38(3), pages 387-399, July.
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    Cited by:
    1. Boris Bravo-Ureta & Daniel Solís & Víctor Moreira López & José Maripani & Abdourahmane Thiam & Teodoro Rivas, 2007. "Technical efficiency in farming: a meta-regression analysis," Journal of Productivity Analysis, Springer, Springer, vol. 27(1), pages 57-72, February.

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