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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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  23. Andrew N. Kleit & Dek Terrell, 2001. "Measuring Potential Efficiency Gains From Deregulation Of Electricity Generation: A Bayesian Approach," The Review of Economics and Statistics, MIT Press, vol. 83(3), pages 523-530, August.
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  25. Kalirajan, K P & Shand, R T, 1999. " Frontier Production Functions and Technical Efficiency Measures," Journal of Economic Surveys, Wiley Blackwell, vol. 13(2), pages 149-72, April.
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  28. Lawrence, Denis & Hone, Phillip, 1981. "Relative Economic Efficiency in the Australian Grazing Industry," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 49(01), April.
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