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Nonparametric measurement of the overall shift in the technology frontier: an application to multiple-output agricultural production data in the Brazilian Amazon

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  • Tsunehiro Otsuki

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Abstract

This article develops a simple, but informative, approach to measure technical changes by applying the Malmquist index framework using data envelopment analysis (DEA). A set of directional vectors is used to capture complete information regarding the overall shift in the technology frontier; we then visualize the DEA frontiers in the output space. This approach deals with the problems of sample dependence and non-circularity of technical change measures. It allows us to measure output-by-output technical change. Furthermore, the geometric mean of the technical change measures derived using this approach satisfies circularity. The application of Malmquist indices to the panel datasets of agricultural production in the Brazilian Amazon during the period 1975–1995 indicates a non-Hicks-neutral technical change, with intersection of frontiers during both the 1975–1985 and the 1985–1995 sub-periods. We find moderate progress in cattle production and annual crops, and a decline in perennial crops (bananas). Technological progress is a modest 0.7% during the period 1975–1995 on average. In addition, comparisons with the sample-dependent measures in the preceding studies demonstrate that these indices are usually sensitive to the distribution of actual sampled data points. Copyright Springer-Verlag 2013

Suggested Citation

  • Tsunehiro Otsuki, 2013. "Nonparametric measurement of the overall shift in the technology frontier: an application to multiple-output agricultural production data in the Brazilian Amazon," Empirical Economics, Springer, vol. 44(3), pages 1455-1475, June.
  • Handle: RePEc:spr:empeco:v:44:y:2013:i:3:p:1455-1475
    DOI: 10.1007/s00181-012-0582-4
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    References listed on IDEAS

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    1. Pastor, Jesus T. & Lovell, C.A. Knox, 2005. "A global Malmquist productivity index," Economics Letters, Elsevier, vol. 88(2), pages 266-271, August.
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    Keywords

    Circularity test; Data envelopment analysis; Malmquist index; Technical change; Directional vectors; Sample independence; C61; D24; O30;

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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