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Estimating technical efficiency of Australian dairy farms using alternative frontier methodologies

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  • Kelvin Balcombe
  • Iain Fraser
  • Jae Kim

Abstract

Technical efficiency is estimated and examined for a cross-section of Australian dairy farms using various frontier methodologies; Bayesian and Classical stochastic frontiers, and Data Envelopment Analysis. The results indicate technical inefficiency is present in the sample data. Also identified are statistical differences between the point estimates of technical efficiency generated by the various methodologies. However, the rank of farm level technical efficiency is statistically invariant to the estimation technique employed. Finally, when confidence/credible intervals of technical efficiency are compared significant overlap is found for many of the farms' intervals for all frontier methods employed. The results indicate that the choice of estimation methodology may matter, but the explanatory power of all frontier methods is significantly weaker when interval estimate of technical efficiency is examined.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Applied Economics.

Volume (Year): 38 (2006)
Issue (Month): 19 ()
Pages: 2221-2236

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Handle: RePEc:taf:applec:v:38:y:2006:i:19:p:2221-2236

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Cited by:
  1. Vu Hoang Linh, 2012. "Efficiency of rice farming households in Vietnam," International Journal of Development Issues, Emerald Group Publishing, vol. 11(1), pages 60-73, April.
  2. Geys, Benny & Moesen, Wim, 2008. "Measuring local government technical (in)efficiency: An application and comparison of FDH, DEA and econometric approaches," Discussion Papers, Research Unit: Market Processes and Governance SP II 2008-21, Social Science Research Center Berlin (WZB).
  3. Sauer, Johannes & Davidova, Sophia & Gorton, Matthew, 2012. "Land Fragmentation, Market Integration and Farm Efficiency: Empirical Evidence from Kosovo," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 123236, Agricultural and Applied Economics Association.
  4. Kelly, E & Shalloo, L & Geary, U & Kinsella, A & Thorne, F & Wallace, M, 2013. "An analysis of the factors associated with technical and scale efficiency of Irish dairy farms," International Journal of Agricultural Management, Institute of Agricultural Management;International Farm Management Association, vol. 2(3), April.
  5. Balcombe, Kelvin George & Doucouliagos, Hristos & Fraser, Iain, 2007. "Input usage, output mix and industry deregulation: an analysis of the Australian dairy manufacturing industry," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(2), June.
  6. Seongho Song & David Yi, 2011. "The fundraising efficiency in U.S. non-profit art organizations: an application of a Bayesian estimation approach using the stochastic frontier production model," Journal of Productivity Analysis, Springer, vol. 35(2), pages 171-180, April.
  7. Murova, Olga I. & Chidmi, Benaissa, 2008. "Impacts of Federal Government Programs and Specific Farm Variables on Technical Effiicency of Dairy Farms," 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia 46822, Southern Agricultural Economics Association.
  8. Sauer, Johannes & Davidova, Sophia & Gorton, Matthew, 2012. "Land Fragmentation and Market Integration - Heterogeneous Technologies in Kosovo," 52nd Annual Conference, Stuttgart, Germany, September 26-28, 2012 137385, German Association of Agricultural Economists (GEWISOLA).

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