Provision of environmental output within a multi-output distance function approach
AbstractThis paper redefines technical efficiency by incorporating provision of environmental goods as one of the outputs of the farm. The proportion of permanent and rough grassland to total agricultural land area is used as a proxy for the provision of environmental goods. Stochastic frontier analysis was conducted using a Bayesian procedure. The methodology is applied to panel data on 215 dairy farms in England and Wales. Results show that farm efficiency rankings change when provision of environmental outputs by farms is incorporated in the efficiency analysis, which may have important political implications.
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Bibliographic InfoArticle provided by Elsevier in its journal Ecological Economics.
Volume (Year): 78 (2012)
Issue (Month): C ()
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Web page: http://www.elsevier.com/locate/ecolecon
Stochastic frontier; Environmental output; Technical efficiency;
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- Barnes, Andrew P., 2012. "A method for constructing an index of sustainable intensification within the developed country context," Working Papers 131466, Scotland's Rural College (formerly Scottish Agricultural College), Land Economy & Environment Research Group.
- Tomasz Gerard Czekaj, 2013. "Measuring the Technical Efficiency of Farms Producing Environmental Output: Parametric and Semiparametric Estimation of Multi-output Stochastic Ray Production Frontiers," IFRO Working Paper 2013/21, University of Copenhagen, Department of Food and Resource Economics.
- Barnes, Andrew P., 2012. "A method for constructing an index of sustainable intensification within the developed country context," Working Papers 131466, Scottish Agricultural College, Land Economy Research Group.
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