A Bayesian Approach To Imposing Curvature On Distance Functions

The estimated parameters of output distance functions frequently violate the monotonicity, quasiconvexity and convexity constraints implied by economic theory, leading to estimated elasticities and shadow prices that are incorrectly signed, and ultimately to perverse conclusions concerning the effects of input and output changes on productivity growth and relative efficiency levels. We show how a Bayesian approach can be used to impose these constraints on the parameters of a translog output distance function. Implementing the approach involves the use of a Gibbs sampler with data augmentation. A Metropolis-Hastings algorithm is also used within the Gibbs to simulate observations from truncated pdfs. Our methods are developed for the case where panel data is available and technical inefficiency effects are assumed to be time-invariant. Two models � a fixed effects model and a random effects model � are developed and applied to panel data on 17 European railways. We observe significant changes in estimated elasticities and shadow price ratios when regularity restrictions are imposed

MEASUREMENT OF AGRICULTURAL TOTAL FACTOR PRODUCTIVITY GROWTH INCORPORATING ENVIRONMENTAL FACTORS: A NUTRIENTS BALANCE APPROACH

This paper develops a new measure of total factor productivity growth in agricultural production which incorporates environmental effects. The new measure is called the Total Factor Nutrient-Orientated Productivity (TFNP) Index, and incorporates a materials balance condition. TFNP measures changes in nutrient-orientated efficiency and can be decomposed into efficiency change (EC), technological change (TC) and nutrient-orientated technological change (NTC) components. An empirical analysis, involving country-level data from OECD countries during 1990-2003, is provided using DEA methods. Estimates of mean technical and nutrient-orientated efficiency are 0.798 and 0.526, respectively. Estimated mean TFNP growth is 1.5% per year, with nutrient-orientated technological progress contributing 0.8%.Total factor productivity, environment, nutrient balance, DEA, Productivity Analysis, Environmental Economics and Policy,

Total Factor Productivity Growth in Agriculture: A Malmquist Index Analysis of 93 Countries,1980-2000

In this paper we examine levels and trends in agricultural output and productivity in 93 developed and developing countries that account for a major portion of the world population and agricultural output. We make use of data drawn from the Food and Agriculture Organization of the United Nations and our study covers the period 1980-2000. Due to the non-availability of reliable input price data, the study uses data envelopment analysis (DEA) to derive Malmquist productivity indexes. The study examines trends in agricultural productivity over the period. Issues of catch-up and convergence, or in some cases possible divergence, in productivity in agriculture are examined within a global framework. The paper also derives the shadow prices and value shares that are implicit in the DEA-based Malmquist productivity indices, and examines the plausibility of their levels and trends over the study period.

DIVERSIFICATION ECONOMIES AND SPECIALISATION EFFICIENCIES IN A MIXED FOOD AND COFFEE SMALLHOLDER FARMING SYSTEM IN PAPUA NEW GUINEA

Smallholder farming systems in Papua New Guinea are characterised by an integrated set of cash cropping and subsistence food cropping activities. In the Highlands provinces, the subsistence food crop sub-system is dominated by sweet potato production. Coffee dominates the cash cropping sub-system, but a limited number of food crops are also grown for cash sale. The dynamics between sub-systems can influence the scope for complementarity between, and technical efficiency of, their operations, especially in light of the seasonality of demand for household labour and management inputs within the farming system. A crucial element of these dynamic processes is diversification into commercial agricultural production, which can influence factor productivity and the efficiency of crop production where smallholders maintain a strong production base in subsistence foods. Data are used on coffee and food crop production for 18 households in the Benabena district of Eastern Highlands Province to derive technical efficiency indices for each household over two years. A stochastic input distance function approach is used to establish whether diversification economies exist and whether specialisation in coffee, subsistence food or cash food production significantly influences technical efficiency on the sampled smallholdings. Diversification economies are weakly evident between subsistence food production and both coffee and cash food production, but diseconomies of diversification are discerned between coffee and cash food production. A number of factors are tested for their effects on technical efficiency. Significant technical efficiency gains are made from diversification among broad cropping activities.Farm Management,

Agricultural Economics Education in Ukrainian Agricultural Universities: An Efficiency Analysis Using Data Envelopment Analysis

Ukraine's transition from a centrally-planned to a market economy has had a profound effect upon its agricultural sector and agricultural universities. A substantial reduction in state financing has forced universities to adopt a range of survival strategies, with varying degrees of success. In this paper we use data envelopment analysis to examine the technical efficiency of 44 agricultural economics programs from 19 Ukrainian universities during the 2002/03 academic year. Our empirical results indicate wide disparities in performance, ranging from 36% to 100% technical efficiency. A second-stage analysis suggests that factors such as student demand, commercial activities and staff quality help explain a portion of this variation.higher education, Ukraine, efficiency, data envelopment analysis, Teaching/Communication/Extension/Profession, I21, C14, Q16,

Efficiency and Productivity Analysis of Cooperative Dairy Plants in Haryana and Punjab States of India

Since the 1970s, the policy of Indian government has been to promote dairy development on the basis of the cooperative organisations. During the 1990s the dairy industry in India was liberalised. This study examines the impact of the liberalisation policy on the cooperative dairy plants in India. Data envelopment analysis (DEA) and the Fisher index approach are applied to measure economic efficiency and total productivity changes, respectively. The data involves 65 observations from a complete panel of 13 cooperative dairy plants from 1992/93 to 1996/97. The empirical results show that the deregulation and liberalisation of the dairy industry alone is not the answer.productivity, efficiency, Fisher index, Indian dairy processing, Agribusiness, Livestock Production/Industries, Productivity Analysis,

CAP Reforms and Total Factor Productivity Growth in Belgian Agriculture: A Malmquist Index Approach

Have the 1992 and 2000 CAP reforms had any discernable effect upon agricultural productivity? In this study we derive detailed information on the total factor productivity (TFP) growth of arable farms in Belgium over a 16-year period from 1987 to 2002. Calculations are based on a carefully constructed high-quality detailed farm-level data set containing 1728 observations, involving over 100 farms in most years. Three output variables (cereals, other crops, other outputs) and four input variables (land, labour, capital and other inputs) are constructed, using multilateral Fisher index numbers where crop aggregation is required. The TFP measures are calculated using a Malmquist TFP index relative to a series of data envelopment analysis (DEA) frontiers. Annual average TFP change of 1.0% per year is estimated for this industry. This rate does not compare well with rates of over 2% that are commonly reported in studies involving other developed countries. The pattern of TFP growth over the period indicates that the two CAP reforms (in 1992 and 2000) have had no discernable effect upon TFP trends. An inspection of shadow shares (derived from the DEA frontiers) indicates that substantial distortions remain in this industry, especially with regards to the excess use of labour and constrained use of land, relative to other inputs. Finally, tabulation of results by region and farm size shows fairly uniform TFP change across regions, but poor performance in small farms, where TFP actually levels actually fell over this period.CAP reforms, Belgian agriculture, total factor productivity, Malmquist index, shadow shares, Agricultural and Food Policy, Productivity Analysis, C6, D2, O4, Q1,

PREDICTING OUTPUT FROM SEEMINGLY UNRELATED AREA AND YIELD EQUATIONS

Crop output can be defined as the product of area sown and yield. Given the existence of separate equations for explaining and predicting area sown and yield, in this paper we suggest predictors for output and derive expressions for the standard errors of the predictors. The methodology is applied to wheat production in the Corrigin Shire of Western Australia.Predicting a product, standard error of prediction, Crop Production/Industries,

A Bayesian Approach To Imposing Curvature On Distance Functions

The estimated parameters of output distance functions frequently violate the monotonicity, quasiconvexity and convexity constraints implied by economic theory, leading to estimated elasticities and shadow prices that are incorrectly signed, and ultimately to perverse conclusions concerning the effects of input and output changes on productivity growth and relative efficiency levels. We show how a Bayesian approach can be used to impose these constraints on the parameters of a translog output distance function. Implementing the approach involves the use of a Gibbs sampler with data augmentation. A Metropolis-Hastings algorithm is also used within the Gibbs to simulate observations from truncated pdfs. Our methods are developed for the case where panel data is available and technical inefficiency effects are assumed to be time-invariant. Two models - a fixed effects model and a random effects model - are developed and applied to panel data on 17 European railways. We observe significant changes in estimated elasticities and shadow price ratios when regularity restrictions are imposed

Total Factor Productivity Growth in Agriculture: A Malmquist Index Analysis of 93 Countries, 1980-2000

In this paper we examine levels and trends in agricultural output and productivity in 93 developed and developing countries that account for a major portion of the world population and agricultural output. We make use of data drawn from the Food and Agriculture Organization of the United Nations and our study covers the period 1980-2000. Due to the non-availability of reliable input price data, the study uses data envelopment analysis (DEA) to derive Malmquist productivity indexes. The study examines trends in agricultural productivity over the period. Issues of catch-up and convergence, or in some cases possible divergence, in productivity in agriculture are examined within a global framework. The paper also derives the shadow prices and value shares that are implicit in the DEA-based Malmquist productivity indices, and examines the plausibility of their levels and trends over the study period