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Transient and persistent technical efficiency and its determinants: the case of crop farms in Austria

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  • Felicity Addo
  • Klaus Salhofer

Abstract

We analyse persistent and transient technical efficiency of crop farms in Austria from 2003 to 2017 by estimating the four-component stochastic frontier model using a multi-step procedure and extend it to account for heterogeneity bias by introducing the Mundlak adjustments. Moreover, we examine the determinants of both transient and persistent technical inefficiency. Results show that farms with favourable natural conditions, a higher share of family labour, and a lower share of owned land are more persistently efficient. Farm specialization, size, and farmers’ age are positively associated with transient efficiency, while subsidies have adverse impacts. Significant technological progress coupled with, on average decreasing technical efficiency indicates a diverging sector.

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  • Felicity Addo & Klaus Salhofer, 2022. "Transient and persistent technical efficiency and its determinants: the case of crop farms in Austria," Applied Economics, Taylor & Francis Journals, vol. 54(25), pages 2916-2932, May.
    • Handle: RePEc:taf:applec:v:54:y:2022:i:25:p:2916-2932
    DOI: 10.1080/00036846.2021.2000580
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    Cited by:

    1. Andrew P. Barnes, 2023. "The role of family life‐cycle events on persistent and transient inefficiencies in less favoured areas," Journal of Agricultural Economics, Wiley Blackwell, vol. 74(1), pages 295-315, February.
    2. Mariarosaria Agostino & Ercan Enzo Comert & Federica Demaria & Sabrina Ruberto, 2024. "What kinds of subsidies affect technical efficiency? The case of Italian dairy farms," Agribusiness, John Wiley & Sons, Ltd., vol. 40(1), pages 116-138, January.
    3. Troncoso, Ricardo & Cabas, Juan & Guesmi, Bouali & Gil, José María, 2023. "A cross-country comparison of pig production systems performance: Evidence from EU countries," Economia Agraria y Recursos Naturales, Spanish Association of Agricultural Economists, vol. 23(02), December.

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