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Input usage, output mix and industry deregulation: an analysis of the Australian dairy manufacturing industry

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  • Balcombe, Kelvin George
  • Doucouliagos, Hristos
  • Fraser, Iain

Abstract

In this paper we estimate a Translog output distance function for a balanced panel of state level data for the Australian dairy processing sector. We estimate a fixed effects specification employing Bayesian methods, with and without the imposition of monotonicity and curvature restrictions. Our results indicate that Tasmania and Victoria are the most technically efficient states with New South Wales being the least efficient. The imposition of theoretical restrictions marginally affects the results especially with respect to estimates of technical change and industry deregulation. Importantly, our bias estimates show changes in both input use and output mix that result from deregulation. Specifically, we find that deregulation has positively biased the production of butter, cheese and powders.

Suggested Citation

  • Balcombe, Kelvin George & Doucouliagos, Hristos & Fraser, Iain, 2007. "Input usage, output mix and industry deregulation: an analysis of the Australian dairy manufacturing industry," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(2), pages 1-20.
    • Handle: RePEc:ags:aareaj:118324
    DOI: 10.22004/ag.econ.118324
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    Cited by:

    1. Kym Anderson & Peter Lloyd & Donald Maclaren, 2007. "Distortions to Agricultural Incentives in Australia Since World War II," The Economic Record, The Economic Society of Australia, vol. 83(263), pages 461-482, December.
    2. Jill Johnes, 2014. "Efficiency and Mergers in English Higher Education 1996/97 to 2008/9: Parametric and Non-parametric Estimation of the Multi-input Multi-output Distance Function," Manchester School, University of Manchester, vol. 82(4), pages 465-487, July.
    3. Rebecca Summary & William Weber, 2012. "Grade inflation or productivity growth? An analysis of changing grade distributions at a regional university," Journal of Productivity Analysis, Springer, vol. 38(1), pages 95-107, August.
    4. Johannes Sauer, 2010. "Deregulation and dairy production systems: a Bayesian distance function approach," Journal of Productivity Analysis, Springer, vol. 34(3), pages 213-237, December.
    5. G. Cornelis van Kooten, 2017. "The Welfare Economics of Dismantling Dairy Quota in a Confederation of States," Working Papers 2017-04, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.
    6. Sauer, Johannes, 2008. "Quota Deregulation and Organic versus Conventional Milk – A Bayesian Distance Function Approach," 82nd Annual Conference, March 31 - April 2, 2008, Royal Agricultural College, Cirencester, UK 36869, Agricultural Economics Society.
    7. Sauer, J., 2009. "Quota Deregulation and Organic versus Conventional Milk – A Bayesian Distance Function Approach," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 44, March.

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