Measuring and explaining farm inefficiency in a panel data set of mixed farms
AbstractThis paper aims to estimate a translog stochastic frontier production function in the analysis of a panel of 150 mixed Catalan farms in the period 1989-1993, in order to attempt to measure and explain variation in technical inefficiency scores with a one-stage approach. The model uses gross value added as the output aggregate measure. Total employment, fixed capital, current assets, specific costs and overhead costs are introduced into the model as inputs. Stochastic frontier estimates are compared with those obtained using a linear programming method using a two-stage approach. The specification of the translog stochastic frontier model appears as an appropriate representation of the data, technical change was rejected and the technical inefficiency effects were statistically significant. The mean technical efficiency in the period analyzed was estimated to be 64.0%. Farm inefficiency levels were found significantly at 5% level and positively correlated with the number of economic size units.
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Bibliographic InfoPaper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 503.
Date of creation: Jul 2000
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Web page: http://www.econ.upf.edu/
Technical efficiency; stochastic frontier approach; agricultural economics; frontier productions; farm efficiency;
Find related papers by JEL classification:
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
This paper has been announced in the following NEP Reports:
- NEP-ALL-2000-10-05 (All new papers)
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