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Farm‐level efficiency and productivity measurement using panel data: wool production in south‐west Victoria
Author(s) -
Fraser Iain,
Hone Phillip
Publication year - 2001
Publication title -
australian journal of agricultural and resource economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.683
H-Index - 49
eISSN - 1467-8489
pISSN - 1364-985X
DOI - 10.1111/1467-8489.00140
Subject(s) - data envelopment analysis , benchmarking , productivity , total factor productivity , panel data , production–possibility frontier , production (economics) , econometrics , malmquist index , economics , agricultural productivity , agricultural economics , statistics , agriculture , mathematics , geography , economic growth , management , archaeology , macroeconomics
In this article we explore some issues surrounding the use of farm‐level efficiency and productivity estimates for benchmarking studies. Using an eight‐year balanced panel of Victorian wool producers we analyse annual variation between estimates of farm‐level technical efficiency derived using Data Envelopment Analysis and Malmquist estimates of Total Factor Productivity. We find that farms change their relative rank in terms of efficiency across years. Also, unlike aggregate studies of Total Factor Productivity, we find at best erratic and modest growth, a worrying result for this industry. However, caution is needed when interpreting these results, and for that matter, benchmarking analysis as currently practised when using frontier estimation techniques like Data Envelopment Analysis.