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Farm Heterogeneity and Efficiency in Polish Agriculture: A Stochastic Frontier Analysis

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  • Hockmann, Heinrich
  • Pieniadz, Agata

Abstract

This paper deals with the estimation of a random coefficient model. The virtue of this approach is that it considers firm heterogeneity, which conventional SFA models do not. Applying the model to Polish farms, the results indicate that the conventional random and fixed effect models overestimate the inefficiency score. In addition, the reasons for inefficiency are analysed. It is shown that despite the fragmentation of Polish agriculture, there is no evidence for scale inefficiency. Moreover, inefficiency could partly be attributed to factors that affect management input and requirements on farms.

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Bibliographic Info

Paper provided by European Association of Agricultural Economists in its series 2008 International Congress, August 26-29, 2008, Ghent, Belgium with number 44278.

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Date of creation: 2008
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Handle: RePEc:ags:eaae08:44278

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Keywords: SFA; random component model; Poland; agriculture; management; Productivity Analysis;

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  1. Laure Latruffe & Kelvin Balcombe & Sophia Davidova & Katarzyna Zawalinska, 2004. "Determinants of technical efficiency of crop and livestock farms in Poland," Applied Economics, Taylor & Francis Journals, vol. 36(12), pages 1255-1263.
  2. Bernhard Br�mmer & Thomas Glauben & Geert Thijssen, 2002. "Decomposition of Productivity Growth Using Distance Functions: The Case of Dairy Farms in Three European Countries," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(3), pages 628-644.
  3. Schmitt, Gunther, 1989. "Farms, Farm Households, and Productivity of Resource Use in Agriculture," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 16(2), pages 257-84.
  4. Antonio Álvarez & Carlos Arias & William Greene, 2004. "Accounting for unobservables in production models:management and inefficiency," Economic Working Papers at Centro de Estudios Andaluces E2004/72, Centro de Estudios Andaluces.
  5. Jondrow, James & Knox Lovell, C. A. & Materov, Ivan S. & Schmidt, Peter, 1982. "On the estimation of technical inefficiency in the stochastic frontier production function model," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 233-238, August.
  6. Chamberlain, Gary, 1984. "Panel data," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 2, chapter 22, pages 1247-1318 Elsevier.
  7. Pollak, Robert A, 1985. "A Transaction Cost Approach to Families and Households," Journal of Economic Literature, American Economic Association, vol. 23(2), pages 581-608, June.
  8. Darla Munroe, 2001. "Economic Efficiency in Polish Peasant Farming: An International Perspective," Regional Studies, Taylor & Francis Journals, vol. 35(5), pages 461-471.
  9. Allen, Douglas W & Lueck, Dean, 1998. "The Nature of the Farm," Journal of Law and Economics, University of Chicago Press, vol. 41(2), pages 343-86, October.
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Cited by:
  1. Cechura, Lukas & Hockmann, Heinrich, 2011. "Efficiency and Heterogeneity in Czech Food Processing Industry," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114314, European Association of Agricultural Economists.
  2. Cechura, Lukas, 2012. "Technological change in the Czech food processing industry: What did we experience in the last decade?," 131st Seminar, September 18-19, 2012, Prague, Czech Republic 135782, European Association of Agricultural Economists.

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