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Doubly Heteroscedastic Stochastic Production Frontiers with an English Cere al Farms

Author

Listed:
  • Hadri, K.
  • Guermat, C.
  • Whittaker, J.

Abstract

In previous studies, measures of technical inefficiency derived from stochastic production frontiers have been estimated from residuals which are sensitive to specification errors. This study corrects for this inaccuracy by extending the doubly heteroscedastic stochastic cost frontier suggested by Hadri (1999) to stochastic production frontier and to panel data. The extended correction for heteroscedasticity is supported by the data. The study uses data on 102 mainly cereal farms in England, and not only estimates technical efficiency but also examines the links between the efficiency of cereal production, cereal area, chemical usage and labour usage. These links are explored because European Union agricultural policy is no longer narrowly concerned solely with farm income levels and productivity, but also embraces environmental quality and rural development concerns. Whenever there are multiple policy goals it is important to gain an understanding of whether there is conflict or complementarity between them.

Suggested Citation

  • Hadri, K. & Guermat, C. & Whittaker, J., 1998. "Doubly Heteroscedastic Stochastic Production Frontiers with an English Cere al Farms," Discussion Papers 9908, University of Exeter, Department of Economics.
    • Handle: RePEc:exe:wpaper:9908
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    Cited by:

    1. Kaddour Hadri & Julie Whittaker, 1999. "Efficiency, Environmental Contaminants and Farm Size: Testing for Links Using Stochastic Production Frontiers," Journal of Applied Economics, Universidad del CEMA, vol. 2, pages 337-356, November.

    More about this item

    Keywords

    ENTERPRISES ; EFFICIENCY ; REGRESSION ANALYSIS ; ECONOMETRICS;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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