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Generalised Farrell Measures of Efficiency: An Application to Milk Processing in Swedish Dairy Plants

  • Forsund, Finn R
  • Hjalmarsson, Lennart

This paper is concerned with the measurement of productive efficiency. Farrell's measures of efficiency are generalized to nonhomogeneous production functions. Several new measures of efficiency have been introduced and applied to the Swedish milk processing industry. The empirical analysis is based on a complete set of cross section- time series data for a period of la years of 28 individual plants producing a homogeneous product, pasteurized milk. Industrial structure and structural change are examined by both studying the shape of the efficiency distributions for the individual units and their changes through time. The aggregate performance of the sector is studied by the development of the different measures of structural efficiency.

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Article provided by Royal Economic Society in its journal The Economic Journal.

Volume (Year): 89 (1979)
Issue (Month): 354 (June)
Pages: 294-315

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Handle: RePEc:ecj:econjl:v:89:y:1979:i:354:p:294-315
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  1. Zellner, A & Revankar, N S, 1969. "Generalized Production Functions," Review of Economic Studies, Wiley Blackwell, vol. 36(106), pages 241-50, April.
  2. Sato, Ryuzo, 1970. "The Estimation of Biased Technical Progress and the Production Function," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 11(2), pages 179-208, June.
  3. Forsund, Finn R & Jansen, Eilev S, 1977. "On Estimating Average and Best Practice Homothetic Production Functions via Cost Functions," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 463-76, June.
  4. Meeusen, Wim & van den Broeck, Julien, 1977. "Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 435-44, June.
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