Premium
Integrating spatial dependence into Stochastic Frontier Analysis
Author(s) -
Areal Francisco José,
Balcombe Kelvin,
Tiffin Richard
Publication year - 2012
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/j.1467-8489.2012.00597.x
Subject(s) - frontier , inefficiency , spatial dependence , econometrics , estimation , bayesian probability , sample (material) , spatial heterogeneity , statistics , stochastic frontier analysis , computer science , mathematics , geography , economics , physics , archaeology , ecology , management , macroeconomics , production (economics) , biology , thermodynamics , microeconomics
An approach to incorporate spatial dependence into stochastic frontier analysis is developed and applied to a sample of 215 dairy farms in England and Wales. A number of alternative specifications for the spatial weight matrix are used to analyse the effect of these on the estimation of spatial dependence. Estimation is conducted using a Bayesian approach and results indicate that spatial dependence is present when explaining technical inefficiency.