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Comparison Of Agricultural Farm Efficiency In Slovak Regions Before And After Eu Accession

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  • Sojkova, Z.
  • Kropkova, Z.
  • Kovae, S.
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    Abstract

    This paper presents results of stochastic parametric approach used in estimation of farm technical efficiency. The estimation of output oriented technical efficiency was based on Stochastic Frontier analysis with Cobb-Douglas production function. Model specification for empirical application were employed Battese and Coelli 1995 model specification, where technical inefficiency effects are explicitly expressed as a function of a vector of firm-specific variables and random error and integrated in the stochastic frontier model. Model also included dummy variable which expressed production conditions in which Slovak farms are operating. We divided farms into two groups of production conditions: productive regions (PR) and less favorable area (LFA) regions. Data set included 79 Slovak farms operating in different regions in 2003-2005 time periods. Following input variables are included in the model: capital, material, labour and agricultural land according to LPIS system. Total product was used as output variable. Our analyses show that farms operated in 2004 achieved significantly highest level of technical efficiency in comparison with year 2003 in both groups of production condition, due to good weather condition in this year and due to increasing subsidy system. From the achieved results we can conclude that the significant statistical differences in average technical efficiency, was detected only in year 2005 between the farms of mentioned production conditions. Higher level of variability, in technical efficiency was detected in farms operating in productive regions compared to technical efficiency of farms in LFA regions.

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    Bibliographic Info

    Paper provided by European Association of Agricultural Economists in its series 107th Seminar, January 30-February 1, 2008, Sevilla, Spain with number 6462.

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    Date of creation: 2008
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    Handle: RePEc:ags:eaa107:6462

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    Related research

    Keywords: less favorable area (LFA); subsidy; stochastic production frontier; panel data; output – oriented technical efficiency; Cobb-Douglas production function; Production Economics; Research Methods/ Statistical Methods;

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    1. Pitt, Mark M. & Lee, Lung-Fei, 1981. "The measurement and sources of technical inefficiency in the Indonesian weaving industry," Journal of Development Economics, Elsevier, vol. 9(1), pages 43-64, August.
    2. Kumbhakar, Subal C & Ghosh, Soumendra & McGuckin, J Thomas, 1991. "A Generalized Production Frontier Approach for Estimating Determinants of Inefficiency in U.S. Dairy Farms," Journal of Business & Economic Statistics, American Statistical Association, vol. 9(3), pages 279-86, July.
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