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

Author

Listed:
  • Iain Fraser

    (LaTrobe University)

  • William C. Horrace

    (Syracuse University)

Abstract

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.

Suggested Citation

  • Iain Fraser & William C. Horrace, 2002. "Technical Efficiency of Australian Wool Production: Point and Confidence Interval Estimates," Public Economics 0206001, EconWPA, revised 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
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    References listed on IDEAS

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    Cited by:

    1. Tai-Hsin Huang & Tong-Liang Kao, 2006. "Joint estimation of technical efficiency and production risk for multi-output banks under a panel data cost frontier model," Journal of Productivity Analysis, Springer, vol. 26(1), pages 87-102, August.
    2. Lohr, Luanne & Park, Timothy A., 2009. "Labor Pains: Valuing Seasonal versus Year-Round Labor on Organic Farms," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 34(2), August.
    3. Lohr, Luanne & Park, Timothy A., 2006. "Technical Efficiency of U. S. Organic Farmers: The Complementary Roles of Soil Management Techniques and Farm Experience," Agricultural and Resource Economics Review, Cambridge University Press, vol. 35(02), pages 327-338, October.

    More about this item

    Keywords

    Wool; Technical Efficiency; MCB; MCC;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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