IDEAS home Printed from
   My bibliography  Save this paper

Distinguishing Different Industry Technologies and Localized Technical Change


  • Morrison Paul, Catherine J.
  • Sauer, Johannes


This contribution is based on the notion that different technologies are present in an industry. These different technologies result in differential “drivers” of economic performance depending on the kind of technology used by the individual firm. In a first step different technologies are empirically distinguished. Subsequently, the associated production patterns are approximated and the respective change over time is estimated. A latent class modelling approach is used to distinguish different technologies for a representative sample of E.U. dairy producers as an industry exhibiting significant structural changes and differences in production systems in the past decades. The production technology is modelled and evaluated by using the flexible functional form of a transformation function and measures of first- and second-order elasticities. We find that overall (average) measures do not well reflect individual firms’ production patterns if the technology of an industry is heterogeneous. If there is more than one type of production frontier embodied in the data, it should be recognized that different firms may exhibit very different output or input intensities and changes associated with different production systems. In particular, in the context of localized technical change, firms with different technologies can be expected to show different technical change patterns, both in terms of overall magnitudes and associated relative output and input mix changes. Assuming a homogenous technology would result in inefficient policy recommendations leading to suboptimal industry outcomes.

Suggested Citation

  • Morrison Paul, Catherine J. & Sauer, Johannes, 2010. "Distinguishing Different Industry Technologies and Localized Technical Change," 84th Annual Conference, March 29-31, 2010, Edinburgh, Scotland 91749, Agricultural Economics Society.
  • Handle: RePEc:ags:aesc10:91749

    Download full text from publisher

    File URL:
    Download Restriction: no

    Other versions of this item:


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Key, Nigel D. & Latruffe, Laure & Sauer, Johannes, 2010. "Subsidies, production structure and technical change – A cross-country comparison," 114th Seminar, April 15-16, 2010, Berlin, Germany 61109, European Association of Agricultural Economists.
    2. Nehring, Richard F. & Sauer, Johannes & Gillespie, Jeffrey M. & Hallahan, Charles B., 2011. "Intensive versus Extensive Dairy Production Systems: Dairy States in the Eastern and Midwestern U.S. and Key Pasture Countries the E.U.: Determining the Competitive Edge," 2011 Annual Meeting, February 5-8, 2011, Corpus Christi, Texas 98824, Southern Agricultural Economics Association.

    More about this item


    Production Economics;

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aesc10:91749. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.