Premium
Measurement of Dynamic Efficiency: A Directional Distance Function Parametric Approach
Author(s) -
Serra Teresa,
Lansink Alfons Oude,
Stefanou Spiro E.
Publication year - 2011
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1093/ajae/aaq175
Subject(s) - allocative efficiency , parametric statistics , function (biology) , reduction (mathematics) , value (mathematics) , econometrics , dynamic efficiency , computer science , sample (material) , order (exchange) , mathematical optimization , mathematics , economics , statistics , microeconomics , chemistry , geometry , neoclassical economics , finance , chromatography , evolutionary biology , biology
This research proposes a parametric estimation of the structural dynamic efficiency measures proposed in 2009 by Silva and Oude Lansink. Overall, technical and allocative efficiency measurements are derived based on a directional distance function and the duality between this function and the optimal value function. The applicability of the parametric proposal is illustrated by assessing dynamic efficiency ratings for a sample of Dutch dairy farms observed from 1995 to 2005. Dynamic efficiency ratings indicate the possibility to achieve long‐run cost savings on the order of 12% that are mainly to be accomplished through a reduction in input use.