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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
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    References listed on IDEAS

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    8. Kelvin Balcombe & Iain Fraser & Jae Kim, 2006. "Estimating technical efficiency of Australian dairy farms using alternative frontier methodologies," Applied Economics, Taylor & Francis Journals, vol. 38(19), pages 2221-2236.
    9. Tim Coelli & Sergio Perelman, 2000. "Technical efficiency of European railways: a distance function approach," Applied Economics, Taylor & Francis Journals, vol. 32(15), pages 1967-1976.
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    13. Watson, Alistair S., 2005. "Productivity and the Dairy Industry," Australasian Agribusiness Review, University of Melbourne, Melbourne School of Land and Environment, vol. 0.
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    15. Geoff Edwards, 2003. "The story of deregulation in the dairy industry," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(1), pages 75-98, March.
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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. repec:ags:gewipr:260032 is not listed on IDEAS
    4. 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.
    5. 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.
    6. van Kooten, Gerrit Cornelis, 2017. "The Welfare Economics of Dismantling Dairy Quota in a Confederation of States," Working Papers 256743, University of Victoria, Resource Economics and Policy.
    7. Sauer, Johannes, 2008. "Quota Deregulation and Organic versus Conventional Milk – A Bayesian Distance Function Approach," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6425, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    8. 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.

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    Keywords

    Agribusiness;

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