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Decomposition of output growth in the Tunisian olive-growing sector: A frontier production function approach

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  • Dhehibi, Boubaker
  • Lachaal, Lassaad
  • Karray, B.
  • Chebil, Ali

Abstract

The aim of this paper is to investigate the relative contribution of technical efficiency, technological change and increased input use to the output growth of the Tunisian olive oil growing farms using a stochastic frontier production function approach applied to panel data for the period 1995- 1997. The proposed methodology is based on the use of a flexible translog functional form. Results indicate that technical efficiency of production in the sample of olive producing farms investigated ranges from a minimum of 24.8% to a maximum of 84.6% with an average technical efficiency estimate of 48.5%. This suggests that olive producers may increase their production by as much as 51.5% through more efficient use of production inputs. Further, the production is characterised by decreasing returns to scale, which on average was 0.8. Finally, investigation of the sources of production growth reveals that the contribution of conventional inputs (labour, in particular) and technical change are found to be the main source of that growth, since total factor productivity increased during the study period, but at a slowing rate.

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Bibliographic Info

Paper provided by European Association of Agricultural Economists in its series 98th Seminar, June 29-July 2, 2006, Chania, Crete, Greece with number 10037.

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Date of creation: 2006
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Handle: RePEc:ags:eaae98:10037

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Keywords: Olive oil sector; Tunisia; productivity; Crop Production/Industries; Demand and Price Analysis;

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  1. Battese, George E., 1992. "Frontier production functions and technical efficiency: a survey of empirical applications in agricultural economics," Agricultural Economics: The Journal of the International Association of Agricultural Economists, International Association of Agricultural Economists, vol. 7(3-4), October.
  2. K.P. Kalirajan & M.B. Obwona & S. Zhao, 1996. "A Decomposition of Total Factor Productivity Growth: The Case of Chinese Agricultural Growth before and after Reforms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(2), pages 331-338.
  3. Paul W. Bauer, 1988. "Decomposing TFP growth in the presence of cost inefficiency, nonconstant returns to scale, and technological progress," Working Paper 8813, Federal Reserve Bank of Cleveland.
  4. Ahmad, Munir & Boris E., Bravo-Ureta, 1995. "An econometric decomposition of dairy output growth," MPRA Paper 37678, University Library of Munich, Germany.
  5. Karagiannis, Giannis & Tzouvelekas, Vangelis, 2001. "Self-Dual Stochastic Production Frontiers And Decomposition Of Output Growth: The Case Of Olive-Growing Farms In Greece," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 30(2), October.
  6. 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.
  7. Lilyan E. Fulginiti & Richard K. Perrin, 1992. "Prices and Productivity in Agriculture," Food and Agricultural Policy Research Institute (FAPRI) Publications 93-gatt2, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
  8. repec:agl:nearer:v:30:y:2001:i:2:p:168-178 is not listed on IDEAS
  9. K. Kalirajan, 1981. "An Econometric Analysis of Yield Variability in Paddy Production," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 29(3), pages 283-294, November.
  10. Lachaal, Lassaad, 1994. "Subsidies, Endogenous Technical Efficiency And The Measurement Of Productivity Growth," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 26(01), July.
  11. Forsund, Finn R. & Lovell, C. A. Knox & Schmidt, Peter, 1980. "A survey of frontier production functions and of their relationship to efficiency measurement," Journal of Econometrics, Elsevier, vol. 13(1), pages 5-25, May.
  12. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
  13. Battese, George E., 1992. "Frontier production functions and technical efficiency: a survey of empirical applications in agricultural economics," Agricultural Economics, Blackwell, vol. 7(3-4), pages 185-208, October.
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