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Measurement of total factor productivity growth and biases in technological change in Western Australian agriculture
Author(s) -
Coelli T. J.
Publication year - 1996
Publication title -
journal of applied econometrics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.878
H-Index - 99
eISSN - 1099-1255
pISSN - 0883-7252
DOI - 10.1002/(sici)1099-1255(199601)11:1<77::aid-jae370>3.0.co;2-h
Subject(s) - total factor productivity , technical change , economics , agriculture , econometrics , productivity , profit (economics) , technological change , index (typography) , agricultural economics , capital (architecture) , growth accounting , statistics , mathematics , microeconomics , macroeconomics , geography , computer science , archaeology , world wide web
This study investigates productivity growth in broad‐acre agriculture in Western Australia. Tornqvist indices of three output groups (crops, sheep products and other) and five input groups (livestock, materials and services, labour, capital and land) are constructed and discussed. Indices of total output and total inputs are also derived and used to form an index of total factor productivity, that is observed to grow at an average annual rage of 2·7%. The input and output indices are also used in the estimation of output supply and input demand equations, derived from a flexible profit function. The Generalized McFadden functional form is used, because it is possible to impose global curvature upon it without loss of flexibility. Asymptotic chi‐square tests reject the hypotheses of Hicks‐neutral technical change in inputs and in outputs. Technical change is observed to be ‘materials and services’ saving relative to the other input groups, and also appears to favour wool and sheepmeat production relative to the other output groups.