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Technical Efficiency of Australian Wool Production: Point and Confidence Interval Estimates

  • I. Fraser

    ()

  • W. Horrace

    ()

A balanced panel of data is used to estimate technical efficiency, employing a fixed-effects stochastic frontier specification for wool producers in Australia. Both point estimates and confidence intervals for technical efficiency are reported. The confidence intervals are constructed using the multiple comparisons with the best (MCB) procedure of Horrace and Schmidt (1996, 2000). The confidence intervals make explicit the precision of the technical efficiency estimates and underscore the dangers of drawing inferences based solely on point estimates. Additionally, they allow identification of wool producers that are statistically efficient and those that are statistically inefficient. The data reveal at the 95% level that twenty-one of the twenty-six wool farms analyzed may be efficient. Copyright Kluwer Academic Publishers 2003

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File URL: http://hdl.handle.net/10.1023/A:1025180205923
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Article provided by Springer in its journal Journal of Productivity Analysis.

Volume (Year): 20 (2003)
Issue (Month): 2 (September)
Pages: 169-190

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Handle: RePEc:kap:jproda:v:20:y:2003:i:2:p:169-190
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  1. Kumbhakar, Subal C., 1990. "Production frontiers, panel data, and time-varying technical inefficiency," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 201-211.
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  11. Cornwell, C. & Schmidt, P., 1993. "Production Frontiers and Efficiency Measurement," Papers 427e, Georgia - College of Business Administration, Department of Economics.
  12. Simar, L., 1991. "Estimating efficiencies from frontier models with panel data: a comparison of parametric, non-parametric and semi-parametric methods with boot strapping," CORE Discussion Papers 1991026, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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  26. Haszler, Henry, et al, 1996. "The Wool Debt, the Wool Stockpile and the National Interest: Did the Garnaut Committee Get It Right?," The Economic Record, The Economic Society of Australia, vol. 72(218), pages 260-71, September.
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