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Report, 2006

Mathematical and econometric approaches to technical efficiency estimation

Johansson, Helena

Abstract

This paper compares technical efficiency estimates from two DEA models and two SFA models in a multiple output dairy farm setting. In the DEA1 model output is aggregated into a single measure, whereas in the DEA2 model output is disaggregated. The SFA is represented by both a Cobb-Douglas and a translog production function. No evidence is found that the mean efficiency levels would differ between the DEA1 model and the two SFA models, but the DEA2 model produces significantly higher levels of efficiency. This is due to its disaggregated nature, which gives higher efficiency levels. The correlations between all models are high and significant, meaning that the efficiency rankings are the same across models. With the same variable specification, the choice between DEA and SFA is much a matter of taste of the researcher however, with more inputs or outputs in DEA the efficiency scores are likely to be biased towards full efficiency

Keywords

dairy farms; data envelopment analysis; multiple output; stochastic frontier

Published in

Working paper series / Swedish University of Agricultural Sciences, Department of Economics
2006, number: 2006:2
Publisher: SLU / Department of Economics

Authors' information

Swedish University of Agricultural Sciences, Department of Economics

UKÄ Subject classification

Social Sciences
Economics and Business

URI (permanent link to this page)

https://res.slu.se/id/publ/8576