Measurement of production inefficiency in a technology and inefficiency heterogeneity setting

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dc.contributor.author Skevas, Ioannis
dc.date.accessioned 2020-04-24T09:31:19Z
dc.date.available 2020-04-24T09:31:19Z
dc.date.issued 2020-03-13
dc.identifier.citation Skevas, I. (2020) 'Measurement of production inefficiency in a technology and inefficiency heterogeneity setting', Applied Economics. doi: 10.1080/00036846.2020.1738327 en
dc.identifier.issn 0003-6846
dc.identifier.uri http://hdl.handle.net/10468/9852
dc.identifier.doi 10.1080/00036846.2020.1738327 en
dc.description.abstract This study shows how the estimates of production inefficiency and of the marginal effects of its determinants can be distorted if not accounting for technology and inefficiency heterogeneity. This is achieved by employing a hierarchical stochastic frontier model with random parameters both in the production frontier and in the inefficiency distribution and comparing its results with a conventional frontier model. German dairy farming is used as a case study and estimation is performed in a Bayesian framework. The results reveal significant differences in the inefficiencies and the calculated marginal effects of its determinants across the two models. Specifically, it is shown that inefficiency is overestimated when heterogeneity is not accounted for. An inflation of the means and the variances of the marginal effects is also observed, with the latter result suggesting that technology heterogeneity dominates inefficiency heterogeneity. According to Bayes factors, the employed hierarchical frontier model is favoured by the data when compared to the conventional frontier model. en
dc.format.mimetype application/pdf en
dc.language.iso en en
dc.publisher Taylor & Francis Group en
dc.rights © 2020, Informa UK Limited, trading as Taylor & Francis Group. All rights reserved. This is an Accepted Manuscript of an item published by Taylor & Francis in Applied Economics on 13 March 2020, available online: https://doi.org/10.1080/00036846.2020.1738327 en
dc.subject Bayesian techniques en
dc.subject Heterogeneity en
dc.subject Marginal effects en
dc.subject Production inefficiency en
dc.title Measurement of production inefficiency in a technology and inefficiency heterogeneity setting en
dc.type Article (peer-reviewed) en
dc.internal.authorcontactother Ioannis Skevas, Food Business & Development, University College Cork, Cork, Ireland. +353-21-490-3000 Email: ioannis.skevas@ucc.ie en
dc.internal.availability Full text available en
dc.check.info Access to this article is restricted until 18 months after publication by request of the publisher. en
dc.check.date 2021-09-13
dc.date.updated 2020-04-24T08:38:44Z
dc.description.version Accepted Version en
dc.internal.rssid 507784326
dc.description.status Peer reviewed en
dc.identifier.journaltitle Applied Economics en
dc.internal.copyrightchecked Yes
dc.internal.licenseacceptance Yes en
dc.internal.IRISemailaddress ioannis.skevas@ucc.ie en
dc.internal.bibliocheck In press. Check vol. / issue / page range. Amend citation accordingly. en
dc.identifier.eissn 1466-4283


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