Measurement of Dynamic Efficiency: A Directional Distance Function Parametric Approach
This research proposes a parametric estimation of the structural dynamic efficiency measures proposed in 2009 by Silva and Oude Lansink. Overall, technical and allocative efficiency measurements are derived based on a directional distance function and the duality between this function and the optimal value function. The applicability of the parametric proposal is illustrated by assessing dynamic efficiency ratings for a sample of Dutch dairy farms observed from 1995 to 2005. Dynamic efficiency ratings indicate the possibility to achieve long-run cost savings on the order of 12% that are mainly to be accomplished through a reduction in input use. Copyright 2010, Oxford University Press.
Volume (Year): 93 (2010)
Issue (Month): 3 ()
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- Fare, Rolf & Grosskopf, Shawna & Noh, Dong-Woon & Weber, William, 2005. "Characteristics of a polluting technology: theory and practice," Journal of Econometrics, Elsevier, vol. 126(2), pages 469-492, June.