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Frontier Technology and Inefficiencies in Programming Sector Models: An Application to Swedish Agriculture

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  • Jonasson, Lars
  • Apland, Jeffrey

Abstract

A new approach to sector modelling with mathematical programming is proposed. The approach is based on information received from nonparametric efficiency analysis of farm data. Efficient farms are used to construct a set of empirically based, multi-input, multi-output technologies in the sector model. To further improve the depiction of production in the model, observed inefficiencies are also incorporated. An application of the technique replicates base-year observations better than a traditional model. Further, the new model has less tendency towards over-specialisation and unrealistic jumps in the price response. By explicitly taking existing structural inefficiencies into account, the model provides indications of the direction and strength of incentives for structural change. Copyright 1997 by Oxford University Press.

Suggested Citation

  • Jonasson, Lars & Apland, Jeffrey, 1997. "Frontier Technology and Inefficiencies in Programming Sector Models: An Application to Swedish Agriculture," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 24(1), pages 109-131.
  • Handle: RePEc:oup:erevae:v:24:y:1997:i:1:p:109-31
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    Cited by:

    1. Speelman, Stijn & Frija, Aymen & Farolfi, Stefano & Buysse, Jeroen & D'Haese, Marijke F.C. & D'Haese, Luc, 2008. "A new methodology for assessing the impact of water-pricing scenarios: case study of small-scale irrigation schemes in South Africa," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 43836, European Association of Agricultural Economists.
    2. Arnade, Carlos Anthony & Trueblood, Michael A., 2002. "Estimating A Profit Function In The Presence Of Inefficiency: An Application To Russian Agriculture," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 27(01), July.
    3. Asmild, Mette & Wiborg, Torben, 1999. "A Relatively Easy-Access Description of the Logistics, Purposes and Function of the Sector Model KRAM," Unit of Economics Working papers 24197, Royal Veterinary and Agricultural University, Food and Resource Economic Institute.
    4. Speelman, Stijn & Buysse, Jeroen & Farolfi, Stefano & Frija, Aymen & D'Haese, Marijke & D'Haese, Luc, 2009. "Estimating the impacts of water pricing on smallholder irrigators in North West Province, South Africa," Agricultural Water Management, Elsevier, vol. 96(11), pages 1560-1566, November.
    5. Arifullah, Shahnaz A. & Önal, Hayri & Chishti, Anwar F., 0. "Effects of technological progress on consumers’ and producers’ welfare: a case study for Pakistan Punjab," Quarterly Journal of International Agriculture, Humboldt-Universität zu Berlin, vol. 49.
    6. Speelman, Stijn & Buysse, Jeroen & Frija, Aymen & D'Haese, Marijke F.C. & D'Haese, Luc, 2008. "Estimating The Effect Of Water Charge Introduction At Small-Scale Irrigation Schemes In North West Province, South Africa," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6646, European Association of Agricultural Economists.
    7. Balogh, Peter & Ertsey, Imre & Fenyves, Veronika & Nagy, Lajos, 2009. "Analysis and optimization regarding the activity of a Hungarian Pig Sales and Purchase Cooperation," Studies in Agricultural Economics, Research Institute for Agricultural Economics, issue 109, April.
    8. Balogh, Peter & Ertsey, Imre & Szucs, Istvan, 2009. "Answer to the challenges of the 21st century in the Hungarian pig sector," 2009 Conference, August 16-22, 2009, Beijing, China 51027, International Association of Agricultural Economists.
    9. Prakashan Veettil & Stijn Speelman & Guido Huylenbroeck, 2013. "Estimating the Impact of Water Pricing on Water Use Efficiency in Semi-arid Cropping System: An Application of Probabilistically Constrained Nonparametric Efficiency Analysis," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 27(1), pages 55-73, January.
    10. Wiborg, Torben, 2000. "A Comparison of Agricultural Sector Models: CRAM, DRAM, SASM and the KVL Model," Unit of Economics Working papers 24211, Royal Veterinary and Agricultural University, Food and Resource Economic Institute.

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