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Regional Differences In Technical Efficiency And Technological Gap Of Norwegian Dairy Farms: A Stochastic Metafrontier Model


  • Alem, Habtamu
  • Lien, Gudbrand
  • Hardaker, J. Brian
  • Guttormsen, Atle


This paper compares technical efficiencies (TEs) and technological gap ratios (TGRs) for dairy farms in the Norwegian regions accounting for differences in working environments. We used the 'true' random effect model of Greene (2005) and the stochastic metafrontier approach by Huang et al. (2014) to estimate TEs and TGRs. The dataset used was farm-level balanced panel data for 23 years (1992-2014) with 5442 observations from 731 dairy firms. The results of the analysis provide empirical evidence of small regional differences in technical efficiencies, technological gap ratios, and input use. Thus, an assumption about joint underlying technology across regions seems to be quite reasonable, since our results implies that the policies in place are working effectively to keep relatively disadvantaged producers in the business. Further, the results may provide some support for the more region-specific agricultural policies, in terms of support schemes and structural regulations.

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  • Alem, Habtamu & Lien, Gudbrand & Hardaker, J. Brian & Guttormsen, Atle, 2017. "Regional Differences In Technical Efficiency And Technological Gap Of Norwegian Dairy Farms: A Stochastic Metafrontier Model," 2017 International Congress, August 28-September 1, 2017, Parma, Italy 260906, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaae17:260906
    DOI: 10.22004/ag.econ.260906

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    1. Alem, Habtamu, 2020. "Performance of the Norwegian dairy farms: A dynamic stochastic approach," Research in Economics, Elsevier, vol. 74(3), pages 263-271.

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