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Technical Efficiency of Australian Wool Production: Point and Confidence Interval Estimates

  • Iain Fraser

    (LaTrobe University)

  • William C. Horrace

    (Syracuse University)

A balanced panel of data is used to estimate technical efficiency, employing a fixed-effects stochastic frontier specification for wool producers in Australia. Both point estimates and confidence intervals for technical efficiency are reported. The confidence intervals are constructed using the Multiple Comparisons with the Best (MCB) procedure of Horrace and Schmidt (2000). The confidence intervals make explicit the precision of the technical efficiency estimates and underscore the dangers of drawing inferences based solely on point estimates. Additionally, they allow identification of wool producers that are statistically efficient and those that are statistically inefficient. The data reveal at the 95% confidence level that twenty-one of the twenty-six wool farms analyzed may be efficient.

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File URL: http://econwpa.repec.org/eps/pe/papers/0206/0206001.pdf
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Paper provided by EconWPA in its series Public Economics with number 0206001.

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Length: 34 pages
Date of creation: 19 Jun 2002
Date of revision: 11 May 2003
Handle: RePEc:wpa:wuwppe:0206001
Note: Type of Document - Acrobat PDF; prepared on IBM PC; to print on HP; pages: 34; figures: included/request from author/draw your own. Multiple comparison procedures applied to wool production
Contact details of provider: Web page: http://econwpa.repec.org

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  11. SIMAR, Léopold & WILSON, Paul, 1995. "Sensitivity Analysis to Efficiency Scores : How to Bootstrap in Nonparametric Frontier Models," CORE Discussion Papers 1995043, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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