Technical Efficiency: A Comparison of Production Frontier Methods

Abstract

Recent differences in the measurement of farm efficiency may be related to the methods employed. Here, four alternative production frontiers are estimated using time‐series, cross‐section data for a sample of Illinois grain farms. Efficiency measures are found to be highly correlated between nonparametric methods, and between parametric methods. However, large differences are noted when efficiency measures are compared between nonparametric and parametric methods. An analysis of farms with large differences, which are efficient under the nonparametric method, indicates that correlations between efficiency measures are much higher when these firms are excluded.

Technical efficiency of small-scale fishing households in Tanzanian coastal villages: an empirical analysis

“…Therefore, the bulk of the variability in the dependent variable of the frontier model can be attributed to harvest rather than to price changes. Revenue has been used as an output measure in a number of Technical Efficiency studies (Neff et al 1993, Coelli and Perelman 2000, Fousekis and Klonaris 2003. Due to the nature of fishing in the study area, access to the means of production -for example, the ownership of nets, canoes etc.…”

Technical efficiency of meat sheep production systems in Spain

“…Again, these costs showed 20 the largest variability, specially the feed costs in pastures, which is a good indicator of 21 the existing diversity in the feed systems used in Aragón as well as the difficulty of 22 rationing them.…”

“…It consists of estimating a production function by 4 Ordinary Least Squares (OLS) and displacing the constant term until all the errors were 5 negative, except one, which was zero. Battese and Coelli (1988), Neff et al (1993) and 6 Murúa and Albisu (1993), among others, provide good examples of this approach.…”

“…Then, we isolate the error component that cannot be 18 controlled by the farmer. Although the paper refers to a specific region, it aims to 19 provide a useful tool, which can be applied elsewhere, to better understand the 20 performance of the lamb sector in a specific region or country.…”

“…17 Using more or less similar data sets than those considered in previous studies, the 18 aim of this paper is to apply econometric models to determine to what extent sheep 19 farms are efficient when allocating input quantities to obtain the final output. 20 Additionally, sheep farms are divided in two main groups according to their efficiency 21 (above and below mean sample values) and are characterized taking into account their 22 1 Aragón is an autonomous region in northern Spain, with a surface area of 47.616 km 2 and a semiarid climate. The methodology used is based on the estimation of a frontier production function 3 following Greene's (1980) procedure.…”