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Dynamic Efficiency Measurement: Theory and Application
Author(s) -
Silva Elvira,
Stefanou Spiro E.
Publication year - 2007
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 - 10.1111/j.1467-8276.2007.00999.x
Subject(s) - nonparametric statistics , econometrics , context (archaeology) , production (economics) , efficiency , measure (data warehouse) , variable (mathematics) , economics , cost efficiency , point (geometry) , process (computing) , computer science , mathematical optimization , mathematics , microeconomics , statistics , database , estimator , biology , paleontology , mathematical analysis , geometry , operating system
Nonparametric dynamic measures of production efficiency are developed in the context of an adjustment‐cost technology and intertemporal cost minimization. Bounds on each efficiency measure are derived for each firm using a nonparametric revealed preference approach. Long‐run efficiency measures indicate the relative efficiency of both variable and dynamic factors while short‐run measures of efficiency indicate whether variable inputs are employed efficiently in the production process. The efficiency measures are temporal in nature by describing the degree of efficiency of the firm at a particular point along its adjustment path. The empirical implementation is illustrated for a balanced panel of Pennsylvania dairy operators during 1986–1992.