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Estimation of Output and Input Technical Efficiency Using a Flexible Form and Panel Data

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  • Atkinson, Scott E
  • Cornwell, Christopher

Abstract

The Farrell (1957) concept of technical efficiency can be measured in two ways--denoted output and input technical efficiency. The empirical literature does not distinguish between the two measures and confusion exists regarding the required restrictions on technology for the specification of either measure. With panel data, the authors show how both types of efficiency, when treated as fixed effects, are to be specified in the context of a translog cost system. Technical efficiency enters the share equations only in the output case when homotheticity is not imposed. The authors estimate their cost systems using panel data on U.S. airlines. Copyright 1994 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

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Bibliographic Info

Article provided by Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association in its journal International Economic Review.

Volume (Year): 35 (1994)
Issue (Month): 1 (February)
Pages: 245-55

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Handle: RePEc:ier:iecrev:v:35:y:1994:i:1:p:245-55

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Cited by:
  1. Madau, Fabio A., 2005. "Technical Efficiency in Organic Farming: An Application on Italian Cereal Farms Using a Parametric Approach," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24545, European Association of Agricultural Economists.
  2. Carmen Fernandez & Gary Koop & M. F. J. Steel, 2004. "Alternative efficiency measures for multiple-output production," ESE Discussion Papers 65, Edinburgh School of Economics, University of Edinburgh.
  3. G. Karagiannis & V. Tzouvelekas & A. Xepapadeas, 2003. "Measuring Irrigation Water Efficiency with a Stochastic Production Frontier," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 26(1), pages 57-72, September.
  4. Martinez-Budria, Eduardo & Diaz-Hernandez, Juan Jose & Jara-Däaz, Sergio, 2011. "Productivity and efficiency with discrete variables and quadratic cost function," International Journal of Production Economics, Elsevier, vol. 132(2), pages 251-257, August.
  5. Florent Kinkingninhoun-Mêdagbé & Aliou Diagne & Franklin Simtowe & Afiavi Agboh-Noameshie & Patrice Adégbola, 2010. "Gender discrimination and its impact on income, productivity, and technical efficiency: evidence from Benin," Agriculture and Human Values, Springer, vol. 27(1), pages 57-69, March.
  6. Pantzios, Christos J. & Rozakis, Stelios & Tzouvelekas, Vangelis, 2006. "Evading Farm Support Reduction via Efficient Input Use: The Case of Greek Cotton Growers," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 38(03), December.
  7. Madau, Fabio A., 2012. "Technical and scale efficiency in the Italian Citrus Farming: A comparison between Stochastic Frontier Analysis (SFA) and Data Envelopment Analysis(DEA) Models," MPRA Paper 41403, University Library of Munich, Germany.
  8. Dhehibi, Boubaker, 2011. "Productive Efficiency in Water Usage: An Analysis of Differences among Citrus Producing Farms Sizes in Tunisia," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114441, European Association of Agricultural Economists.
  9. Furesi, Roberto & Madau, Fabio A. & Pulina, Pietro, 2011. "Technical Efficiency in the Sheep Dairy Industry: an Application on the Sardinian (Italy) Sector," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114348, European Association of Agricultural Economists.
  10. Pantzios, Christos J. & Rozakis, Stelios & Tzouvelekas, Vangelis, 2002. "Assessing the Perspectives of EU Cotton Farming: Technical and Scale Efficiencies of Greek Cotton Growers," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24844, European Association of Agricultural Economists.
  11. Juan José Díaz-Hernández, . "Exact Allocative and Technical Inefficiency Using the Normalized Quadratic Cost System," Studies on the Spanish Economy 210, FEDEA.
  12. Tai-Hsin Huang & Mei-Hui Wang, 2004. "Estimation of scale and scope economies in multiproduct banking: evidence from the Fourier flexible functional form with panel data," Applied Economics, Taylor & Francis Journals, vol. 36(11), pages 1245-1253.
  13. Sari, Nazmi, 2003. "Efficiency outcomes of market concentration and managed care," International Journal of Industrial Organization, Elsevier, vol. 21(10), pages 1571-1589, December.
  14. Cisilino, Federica & Madau, Fabio A., 2007. "Organic and Conventional Farming: a Comparison Analysis through the Italian FADN," MPRA Paper 21786, University Library of Munich, Germany.

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