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Technology heterogeneity and policy change in farm-level efficiency analysis: an application to the Irish beef sector

Author

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  • Maria Martinez Cillero
  • Fiona Thorne
  • Michael Wallace
  • James Breen

Abstract

This paper assesses the consequences of technological heterogeneity when analysing the effects of policy changes on technical efficiency, using Irish beef farming as a case study. A latent class stochastic frontier model is estimated. Results suggest that a single frontier model overestimates technical inefficiency compared to the model where technology heterogeneity is accounted for. The paper also evaluates factors that influence technical efficiency, particularly the impacts of the 2003 reform of the Common Agricultural Policy. Results indicate that the introduction of decoupled payments had significant positive effects on efficiency of farms operating under only two of the three identified technologies.

Suggested Citation

  • Maria Martinez Cillero & Fiona Thorne & Michael Wallace & James Breen, 2019. "Technology heterogeneity and policy change in farm-level efficiency analysis: an application to the Irish beef sector," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 46(2), pages 193-214.
    • Handle: RePEc:oup:erevae:v:46:y:2019:i:2:p:193-214.
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    File URL: http://hdl.handle.net/10.1093/erae/jby028
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    Cited by:

    1. Ahimbisibwe, Vianny & Zhunusova, Eliza & Kassa, Habtemariam & Günter, Sven, 2024. "Technical efficiency drivers of farmer-led restoration strategies, and how substantial is the unrealised potential for farm output?," Agricultural Systems, Elsevier, vol. 213(C).
    2. Laure Latruffe & Andreas Niedermayr & Yann Desjeux & K Herve Dakpo & Kassoum Ayouba & Lena Schaller & Jochen Kantelhardt & Yan Jin & Kevin Kilcline & Mary Ryan & Cathal O’Donoghue, 2023. "Identifying and assessing intensive and extensive technologies in European dairy farming," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 50(4), pages 1482-1519.
    3. Lajos Baráth & Imre Fertő & Heinrich Hockmann, 2020. "Technological Differences, Theoretical Consistency, and Technical Efficiency: The Case of Hungarian Crop-Producing Farms," Sustainability, MDPI, vol. 12(3), pages 1-18, February.
    4. Amer Ait Sidhoum & K Hervé Dakpo & Laure Latruffe, 2022. "Trade-offs between economic, environmental and social sustainability on farms using a latent class frontier efficiency model: Evidence for Spanish crop farms," PLOS ONE, Public Library of Science, vol. 17(1), pages 1-17, January.
    5. Skevas, Ioannis, 2024. "Accounting for technology heterogeneity in the measurement of persistent and transient inefficiency," Economic Modelling, Elsevier, vol. 137(C).
    6. K Hervé Dakpo & Laure Latruffe & Yann Desjeux & Philippe Jeanneaux, 2021. "Latent Class Modelling for a Robust Assessment of Productivity: Application to French Grazing Livestock Farms," Journal of Agricultural Economics, Wiley Blackwell, vol. 72(3), pages 760-781, September.
    7. Jean‐Paul Chavas & Doris Läpple & Bradford Barham & Emma Dillon, 2022. "An economic analysis of production efficiency: Evidence from Irish farms," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 70(2), pages 153-173, June.
    8. Elizabeth Ahikiriza & Jef Meensel & Xavier Gellynck & Ludwig Lauwers, 2021. "Heterogeneity in frontier analysis: does it matter for benchmarking farms?," Journal of Productivity Analysis, Springer, vol. 56(2), pages 69-84, December.
    9. Doris Läpple & Colin A. Carter & Cathal Buckley, 2022. "EU milk quota abolition, dairy expansion, and greenhouse gas emissions," Agricultural Economics, International Association of Agricultural Economists, vol. 53(1), pages 125-142, January.
    10. Garcia, Luis & Laepple, Doris & Dillon, Emma & Thorne, Fiona, 2020. "The role of hired labor in transient and persistent technical efficiency on Irish dairy farms," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304395, Agricultural and Applied Economics Association.
    11. Vladimír Kostlivý & Zuzana Fuksová & Tamara Rudinskaya, 2020. "Drivers of farm performance in Czech crop farms," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 66(7), pages 297-306.
    12. Kehinde Oluseyi Olagunju & Myles Patton & Siyi Feng, 2020. "Estimating the Impact of Decoupled Payments on Farm Production in Northern Ireland: An Instrumental Variable Fixed Effect Approach," Sustainability, MDPI, vol. 12(8), pages 1-17, April.
    13. Lungelo P. Cele & Thia Hennessy & Fiona Thorne, 2023. "Regional technical efficiency rankings and their determinants in the Irish dairy industry: A stochastic meta‐frontier analysis," Agribusiness, John Wiley & Sons, Ltd., vol. 39(3), pages 727-743, July.
    14. Asif Reza Anik & Sanzidur Rahman & Jaba Rani Sarker, 2020. "Five Decades of Productivity and Efficiency Changes in World Agriculture (1969–2013)," Agriculture, MDPI, vol. 10(6), pages 1-20, June.

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