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Multiple-Output Production With Undesirable Outputs: An Application to Nitrogen Surplus in Agriculture

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Author Info

  • Carmen Fernandez

    (University of St.Andrews)

  • Gary Koop

    (University of Glasgow)

  • Mark F.J. Steel

    (University of Kent at Canterbury)

Abstract

Many production processes yield both good outputs and undesirable ones (e.g. pollutants). In this paper, we develop a generalization of a stochastic frontier model which is appropriate for such technologies. We discuss efficiency analysis and, in particular, define technical and environmental efficiency in the context of our model. Methods for carrying out Bayesian inference are developed and applied to a panel data set of Dutch dairy farms, where excess nitrogen production constitutes an important environmental problem.

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Bibliographic Info

Paper provided by EconWPA in its series Econometrics with number 0201001.

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Length: 27 pages
Date of creation: 06 Jan 2002
Date of revision: 06 Jan 2002
Handle: RePEc:wpa:wuwpem:0201001

Note: Type of Document - Tex (plain); prepared on IBM PC - PC-TEX; to print on HP/PostScript (A4); pages: 27 ; figures: included. Forthcoming in Journal of the American Statistical Association (Applications and Case Studies)
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Web page: http://128.118.178.162

Related research

Keywords: Dairy farm; Efficiency; Environment; Longitudinal data; Stochastic frontier;

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