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A Parametric Approach to Estimating Eco‐Efficiency
Author(s) -
Orea Luis,
Wall Alan
Publication year - 2017
Publication title -
journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.157
H-Index - 61
eISSN - 1477-9552
pISSN - 0021-857X
DOI - 10.1111/1477-9552.12209
Subject(s) - data envelopment analysis , stochastic frontier analysis , measure (data warehouse) , econometrics , sample (material) , production–possibility frontier , production (economics) , parametric statistics , frontier , economics , computer science , mathematics , microeconomics , statistics , data mining , geography , chemistry , archaeology , chromatography
The concept of eco‐efficiency is becoming increasingly popular as a tool to capture economic and environmental aspects of agricultural production. The literature to date has exclusively used the Data Envelopment Analysis (DEA) approach to measure producers’ eco‐efficiency. We show that it can also be estimated using a Stochastic Frontier Analysis (SFA) approach. Our approach not only allows controlling for random noise in the data but also permits an analysis of the potential substitutability between environmental pressures. We provide an empirical application of our model to data on a sample of Spanish dairy farms.