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On Sources of Measured Technical Efficiency: The Impact of Information
Author(s) -
Müller Jürgen
Publication year - 1974
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 - 10.2307/1239302
Subject(s) - production (economics) , productivity , homothetic transformation , production–possibility frontier , econometrics , economics , frontier , point (geometry) , function (biology) , sample (material) , production theory , production function , estimation , microeconomics , computer science , mathematics , macroeconomics , geography , physics , management , geometry , archaeology , evolutionary biology , biology , thermodynamics
The concept of technical efficiency differences—different levels of output with identical levels of input—is unsatisfactory from a production theoretic point of view. In this paper a model is developed in which differences in non‐conventional inputs and especially information obtained by managers may explain productivity differences between firms. Estimation of the underlying production structure (of a sample of California dairy farms) via a modified non‐homothetic Cobb‐Douglas production function shows the specific impact of information within the neoclassical production framework. This is conceptually and analytically superior to the methodology of frontier production functions.