Technical Efficiency of Australian Wool Production: Point and Confidence Interval Estimates

I. M. Fraser, W. C. Horrace

Research output: Contribution to journalArticlepeer-review

8 Scopus citations


A balanced panel of data is used to estimate technical efficiency, employing a fixed-effects stochastic frontier specification for wool producers in Australia. Both point estimates and confidence intervals for technical efficiency are reported. The confidence intervals are constructed using the multiple comparisons with the best (MCB) procedure of Horrace and Schmidt (1996, 2000). The confidence intervals make explicit the precision of the technical efficiency estimates and underscore the dangers of drawing inferences based solely on point estimates. Additionally, they allow identification of wool producers that are statistically efficient and those that are statistically inefficient. The data reveal at the 95% level that twenty-one of the twenty-six wool farms analyzed may be efficient.

Original languageEnglish (US)
Pages (from-to)169-190
Number of pages22
JournalJournal of Productivity Analysis
Issue number2
StatePublished - Sep 2003


  • Multiple comparisons
  • Production functions
  • Stochastic frontier
  • Wool

ASJC Scopus subject areas

  • Business and International Management
  • Social Sciences (miscellaneous)
  • Economics and Econometrics


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