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

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

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.

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File URL: http://purl.umn.edu/118324
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Article provided by Australian Agricultural and Resource Economics Society in its journal Australian Journal of Agricultural and Resource Economics.

Volume (Year): 51 (2007)
Issue (Month): 2 (June)
Pages:

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Handle: RePEc:ags:aareaj:118324
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  1. Fraser, Iain & Graham, Mary, 2005. "Efficiency Measurement of Australian Dairy Farms: National and Regional Performance," Australasian Agribusiness Review, University of Melbourne, Melbourne School of Land and Environment, vol. 13.
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  17. repec:ags:auagre:126559 is not listed on IDEAS
  18. Atkinson, Scott E. & Dorfman, Jeffrey H., 2005. "Bayesian measurement of productivity and efficiency in the presence of undesirable outputs: crediting electric utilities for reducing air pollution," Journal of Econometrics, Elsevier, vol. 126(2), pages 445-468, June.
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