A reduced-form model for dynamic efficiency measurement: Application to dairy farms in Germany and the Netherlands

TY - JOUR

T1 - A reduced-form model for dynamic efficiency measurement

T2 - Application to dairy farms in Germany and the Netherlands

AU - Emvalomatis, Grigorios

AU - Stefanou, Spiro E.

AU - Oude Lansink, Alfons

PY - 2011/1/1

Y1 - 2011/1/1

N2 - The stochastic distance function model is extended to allow for the inefficiency component of the error term to be autocorrelated, as implied by a dynamic model of firm behavior. The autocorrelation parameter can then be interpreted as a measure of the persistence of inefficiency. The model is viewed from a state-space perspective, and Kalman filtering techniques are proposed for estimation. The model is applied to two panels of dairy farms from Germany and the Netherlands. The results suggest a very high degree of persistence of inefficiency through time.

AB - The stochastic distance function model is extended to allow for the inefficiency component of the error term to be autocorrelated, as implied by a dynamic model of firm behavior. The autocorrelation parameter can then be interpreted as a measure of the persistence of inefficiency. The model is viewed from a state-space perspective, and Kalman filtering techniques are proposed for estimation. The model is applied to two panels of dairy farms from Germany and the Netherlands. The results suggest a very high degree of persistence of inefficiency through time.

UR - https://www.scopus.com/pages/publications/79952940996

U2 - 10.1093/ajae/aaq125

DO - 10.1093/ajae/aaq125

M3 - Article

AN - SCOPUS:79952940996

SN - 0002-9092

VL - 93

SP - 161

EP - 174

JO - American Journal of Agricultural Economics

JF - American Journal of Agricultural Economics

IS - 1

ER -