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

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  • I. Fraser
  • W. Horrace

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. Copyright Kluwer Academic Publishers 2003

Suggested Citation

  • I. Fraser & W. Horrace, 2003. "Technical Efficiency of Australian Wool Production: Point and Confidence Interval Estimates," Journal of Productivity Analysis, Springer, vol. 20(2), pages 169-190, September.
    • Handle: RePEc:kap:jproda:v:20:y:2003:i:2:p:169-190
    DOI: 10.1023/A:1025180205923
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    3. Lohr, Luanne & Park, Timothy A., 2009. "Labor Pains: Valuing Seasonal versus Year-Round Labor on Organic Farms," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 34(2), pages 1-16, August.
    4. Mohamed Adel Dhif & Mohamed Mekki Ben Jemaa, 2004. "Uncertainty and Risk Aversion: Implication for Tunisian Cereals Crops," Working Papers 0415, Economic Research Forum, revised 07 Jan 2004.

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    More about this item

    Keywords

    production functions; stochastic frontier; multiple comparisons; wool;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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