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Explaining Output Growth With A Heteroscedastic Non-Neutral Production Frontier: The Case Of Sheep Farms In Greece

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  • Giannis Karagiannis

    ()
    (Department of Economics, University of Macedonia, Greece)

  • Vangelis Tzouvelekas

    ()
    (Department of Economics, University of Crete, Greece)

Abstract

This paper extends the primal decomposition of TFP changes to the case of non-neutral production frontiers. Output growth is decomposed into input growth (size effect), changes in technical efficiency, technical change, and the effect of returns to scale. Within the proposed formulation, however, technical efficiency changes are attributed not only to autonomous changes (i.e., passage of time) but also to changes in input use and in the not-so-fixed farm characteristics. The empirical model is based on a heteroscedastic non-neutral production frontier and an unbalanced panel data set of sheep farms in Greece for the period 1989-92. The technical efficiency change effect is found to be the main source of TFP growth, followed by technical change and the scale effect, which has caused a 0.35% output slowdown The not-so-fixed farm characteristics have been the most important determinant of technical efficiency changes, followed by changes in input use.

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Bibliographic Info

Paper provided by University of Crete, Department of Economics in its series Working Papers with number 0409.

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Length: 34 pages
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Handle: RePEc:crt:wpaper:0409

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  1. Hung-Jen Wang, 2002. "Heteroscedasticity and Non-Monotonic Efficiency Effects of a Stochastic Frontier Model," Journal of Productivity Analysis, Springer, vol. 18(3), pages 241-253, November.
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Cited by:
  1. Serra, Teresa & Zilberman, David & Gil, Jose Maria, 2008. "Farms' technical inefficiencies in the presence of government programs," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 52(1), March.
  2. Madau, Fabio A., 2010. "Parametric Estimation Of Technical And Scale Efficiencies In Italian Citrus Farming," MPRA Paper 26818, University Library of Munich, Germany.
  3. Furesi, Roberto & Madau, Fabio A. & Pulina, Pietro, 2011. "Technical Efficiency in the Sheep Dairy Industry: an Application on the Sardinian (Italy) Sector," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114348, European Association of Agricultural Economists.
  4. Saldias, Rodrigo & von Cramon-Taubadel, Stephan, 2012. "Access to credit and the determinants of technical inefficiency among specialized small farmers in Chile," DARE Discussion Papers 1211, Georg-August University of Göttingen, Department of Agricultural Economics and Rural Development (DARE).
  5. Lokina, Razack B., 2008. "Technical Efficiency and the Role of Skipper Skill in Artisanal Lake Victoria Fisheries," Discussion Papers dp-08-13-efd, Resources For the Future.
  6. Madau, Fabio A., 2012. "Technical and scale efficiency in the Italian Citrus Farming: A comparison between Stochastic Frontier Analysis (SFA) and Data Envelopment Analysis(DEA) Models," MPRA Paper 41403, University Library of Munich, Germany.

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