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

I. M. Fraser; W. C. Horrace

doi:10.1023/A:1025180205923

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

I. M. Fraser, W. C. Horrace

Department of Economics

Research output: Contribution to journal › Article › peer-review

8 Scopus citations

Abstract

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 language	English (US)
Pages (from-to)	169-190
Number of pages	22
Journal	Journal of Productivity Analysis
Volume	20
Issue number	2
DOIs	https://doi.org/10.1023/A:1025180205923
State	Published - Sep 2003

Keywords

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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10.1023/A:1025180205923

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title = "Technical Efficiency of Australian Wool Production: Point and Confidence Interval Estimates",

abstract = "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.",

keywords = "Multiple comparisons, Production functions, Stochastic frontier, Wool",

author = "Fraser, {I. M.} and Horrace, {W. C.}",

note = "Funding Information: The effort of Lee Beattie (NRE, Hamilton) in assisting with the data is appreciated, as are the comments of two anonymous referees. Also, thanks to Denise Paul, Mindy Tanner and Toni Metzger for their excellent editorial assistance. This paper was written while the first author was visiting the University of Arizona, Department of Agricultural and Resource Economics under the Hillman Endowment Award, whose generosity is gratefully acknowledged. The second author acknowledges the generous support of the Office of the Vice Chancellor of Syracuse University.",

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language = "English (US)",

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AU - Horrace, W. C.

N1 - Funding Information: The effort of Lee Beattie (NRE, Hamilton) in assisting with the data is appreciated, as are the comments of two anonymous referees. Also, thanks to Denise Paul, Mindy Tanner and Toni Metzger for their excellent editorial assistance. This paper was written while the first author was visiting the University of Arizona, Department of Agricultural and Resource Economics under the Hillman Endowment Award, whose generosity is gratefully acknowledged. The second author acknowledges the generous support of the Office of the Vice Chancellor of Syracuse University.

PY - 2003/9

Y1 - 2003/9

N2 - 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.

AB - 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.

KW - Multiple comparisons

KW - Production functions

KW - Stochastic frontier

KW - Wool

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ER -

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

Abstract

Keywords

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