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Separating Technical Change From Time-Varying Technical Inefficiency In The Absence Of Distributional Assumptions

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  • Karagiannis, Giannis
  • Midmore, Peter
  • Tzouvelekas, Vangelis

Abstract

This paper proposes an alternative approach for separating technical change from time-varying technical inefficiency. The approach uses the general index, developed by Baltagi and Griffin (1988), to model technical change along the production function, and a quadratic function of time trend, as in Cornwell, Schmidt and Sickles (1990), to capture the temporal pattern of technical inefficiency. In such a setting, all parameters associated with the rate of technical change and the temporal pattern of technical inefficiency are identified separately. Moreover, the proposed approach is independent of any distributional assumption concerning the one-sided error term associated with technical inefficiency, and can easily be estimated using FGLS. Comparative empirical results based on a translog production frontier function, and estimates of technical inefficiency and technical change are presented for the UK dairy sector over the period 1982-1992.

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Bibliographic Info

Paper provided by Agecon Search in its series Miscellaneous Papers with number 11842.

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Date of creation: 1999
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Handle: RePEc:ags:miscpa:11842

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Related research

Keywords: TIME-VARYING EFFICIENCY; PANEL DATA; DAIRY; Research and Development/Tech Change/Emerging Technologies; O0; Q1;

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References

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  1. George E. Battese & Sohail J. Malik & Manzoor A. Gill, 1996. "An Investigation Of Technical Inefficiencies Of Production Of Wheat Farmers In Four Districts Of Pakistan," Journal of Agricultural Economics, Wiley Blackwell, vol. 47(1-4), pages 37-49.
  2. Ahmad, Munir & Boris E., Bravo-Ureta, 1996. "Technical efficiency measures for dairy farms using panel data: a comparison of alternative model specifications," MPRA Paper 37703, University Library of Munich, Germany.
  3. Almas Heshmati, 1998. "Efficiency measurement in rotating panel data," Applied Economics, Taylor & Francis Journals, vol. 30(7), pages 919-930.
  4. Coelli, Tim J. & Battese, George E., 1996. "Identification Of Factors Which Influence The Technical Inefficiency Of Indian Farmers," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 40(02), August.
  5. C. R. Dryburgh & C. J. Doyle, 1995. "Distribution Of Research Gains Under Different Market Structures: The Impact Of Technological Change Within The Uk Dairy Industry," Journal of Agricultural Economics, Wiley Blackwell, vol. 46(1), pages 80-96.
  6. Ahmad, Munir & Boris E., Bravo-Ureta, 1995. "An econometric decomposition of dairy output growth," MPRA Paper 37678, University Library of Munich, Germany.
  7. Kumbhakar, Subal C., 1990. "Production frontiers, panel data, and time-varying technical inefficiency," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 201-211.
  8. Almas Heshmati & Subal C. Kumbhakar, 1997. "Estimation Of Technical Efficiency In Swedish Crop Farms: A Pseudo Panel Data Approach," Journal of Agricultural Economics, Wiley Blackwell, vol. 48(1-3), pages 22-37.
  9. Kumbhakar, Subal C & Hjalmarsson, Lennart, 1995. " Decomposing Technical Change with Panel Data: An Application to the Public Sector," Scandinavian Journal of Economics, Wiley Blackwell, vol. 97(2), pages 309-23, June.
  10. Baltagi, Badi H & Griffin, James M, 1988. "A General Index of Technical Change," Journal of Political Economy, University of Chicago Press, vol. 96(1), pages 20-41, February.
  11. S. M. Mukhtar & P. J. Dawson, 1990. "Herd Size And Unit Costs Of Production In The England And Wales Dairy Sector," Journal of Agricultural Economics, Wiley Blackwell, vol. 41(1), pages 9-20.
  12. Rigby, Dan & Young, Trevor, 1996. "European Environmental Regulations to Reduce Water Pollution: An Analysis of Their Impact on UK Dairy Farms," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 23(1), pages 59-78.
  13. Kumbhakar, Subal C. & Heshmati, Almas & Hjalmarsson, Lennart, 1997. "Temporal patterns of technical efficiency: Results from competing models," International Journal of Industrial Organization, Elsevier, vol. 15(5), pages 597-616, August.
  14. Cornwell, Christopher & Schmidt, Peter & Sickles, Robin C., 1990. "Production frontiers with cross-sectional and time-series variation in efficiency levels," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 185-200.
  15. Vo Hung Son, Tran & Coelli, Tim & Fleming, Euan, 1993. "Analysis of the technical efficiency of state rubber farms in Vietnam," Agricultural Economics, Blackwell, vol. 9(3), pages 183-201, September.
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Citations

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Cited by:
  1. Vangelis Tzouvelekas & Dimitra Vouvaki & Anastasios Xepapadeas, 2006. "Total Factor Productivity Growth and the Environment: A Case for Green Growth Accounting," Working Papers 0617, University of Crete, Department of Economics.
  2. Yan, Jia & Sun, Xinyu & Liu, John J., 2009. "Assessing container operator efficiency with heterogeneous and time-varying production frontiers," Transportation Research Part B: Methodological, Elsevier, vol. 43(1), pages 172-185, January.
  3. Rene Fahr & Uwe Sunde, 2006. "Regional dependencies in job creation: an efficiency analysis for Western Germany," Applied Economics, Taylor & Francis Journals, vol. 38(10), pages 1193-1206.
  4. Giannis Karagiannis & Peter Midmore & Vangelis Tzouvelekas, . "Parametric Decomposition Of Output Growth," Working Papers 0204, University of Crete, Department of Economics.
  5. Boris Bravo-Ureta & Daniel Solís & Víctor Moreira López & José Maripani & Abdourahmane Thiam & Teodoro Rivas, 2007. "Technical efficiency in farming: a meta-regression analysis," Journal of Productivity Analysis, Springer, vol. 27(1), pages 57-72, February.
  6. Almas Heshmati & Subal C. Kumbhakar, 2010. "Technical Change and Total Factor Productivity Growth: The Case of Chinese Provinces," TEMEP Discussion Papers 201054, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Feb 2010.
  7. David I. Stern, 2004. "Diffusion of Emissions Abating Technology," Rensselaer Working Papers in Economics 0420, Rensselaer Polytechnic Institute, Department of Economics.
  8. Suzanne O’Neill & Alan Matthews, 2001. "Technical Change and Efficiency in Irish Agriculture," The Economic and Social Review, Economic and Social Studies, vol. 32(3), pages 263-284.

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