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Modeling heterogeneity in production models: empirical evidence from individual farming in Poland

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  • Hockmann, Heinrich
  • Pieniadz, Agata
  • Goraj, Lech

Abstract

This discussion paper deals with the estimation of a random coefficient model. The virtue of this approach is that it considers firm heterogeneity, which conventional SFA models do not. Applying the model to Polish farms, the results indicate that the conventional random and fixed effect models overestimate the inefficiency score. In addition, the reasons for inefficiency are analyzed. It is shown that despite the fragmentation of Polish agriculture, there is no evidence for scale inefficiency. Moreover, inefficiency could partly be attributed to factors, which affect the management input and requirements on farms. -- G E R M A N V E R S I O N: Das vorliegende Diskussionspapier befasst sich mit Schätzung von Random Parameter Modellen in Rahmen von Frontier Analysen. Ein wesentlicher Vorteil dieses Ansatzes liegt darin, dass er im Gegensatz zu den konventionellen SFA die Heterogenität der Untersuchungseinheiten berücksichtigt. Die empirische Analyse bezieht sich auf landwirtschaftliche Betriebe in Polen. Die Ergebnisse deuten darauf hin, dass die konventionellen Random und Fixed Effect Modelle das Niveau der Inneffizienz überschätzen. Weiterhin wurden die Ursachen der Ineffizienz untersucht. Obwohl die polnische Landwirtschaft sehr zersplittert ist, lieferten die Ergebnisse keinen statistisch gesicherten Beweis für Vorliegen von Skalenineffizienzen. Die Ursachen der Ineffizienzen liegen dagegen in Faktoren, welche auf unternehmerische Fähigkeiten des Betriebsleiters sowie betriebsorganisatorische Aspekte zurückgeführt werden können.

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Bibliographic Info

Paper provided by Leibniz Institute of Agricultural Development in Central and Eastern Europe (IAMO) in its series IAMO Discussion Papers with number 109.

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Date of creation: 2007
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Handle: RePEc:zbw:iamodp:109

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Related research

Keywords: random component model; Poland; management; SFA; Random Parameter Modell; Polen; Management;

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Cited by:
  1. Tomasz Gerard Czekaj & Arne Henningsen, 2012. "Comparing Parametric and Nonparametric Regression Methods for Panel Data: the Optimal Size of Polish Crop Farms," IFRO Working Paper 2012/12, University of Copenhagen, Department of Food and Resource Economics.
  2. Buchenrieder, Gertrud & Hanf, Jon Henrich & Pieniadz, Agata, 2009. "20 years of transition in the agri-food sector," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 58(7).
  3. Lukáš Čechura & Heinrich Hockmann, 2010. "Sources of Economical Growth in the Czech Food Processing," Prague Economic Papers, University of Economics, Prague, vol. 2010(2), pages 169-182.

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