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Sources of productivity growth using the Färe-Primont decomposition. An empirical application to the Irish beef sector

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  • Maria Martinez Cillero
  • Fiona Thorne

Abstract

Several competing methodologies for TFP estimation have been developed in the past decades. A popular approach in the literature is index number computation. The most widely implemented TFP indices face however several important limitations. For example, Fisher, Tornqvist or Malmquist TFP indices do not satisfy the transitivity test, precluding reliable direct inter-temporal comparisons. The recently developed Färe-Primont TFP index satisfies this property, and therefore it is applied to analyse the evolution of TFP in the Irish beef sector between 2010 and 2016. Moreover, this index is multiplicatively complete, allowing a consistent decomposition of TFP growth in different sources. The sample of Irish beef farms used in the analysis is clustered to account for differences in production technology in the sector. The cluster-specific TFP changes computed were found to present important differences across the seven clusters identified. Significant TFP growth was identified in five of the classes, while TFP declined for the other two. Dispersion and mobility of the TFP levels indicate a lack of structural changes in the sector regardless of the cluster considered.

Suggested Citation

  • Maria Martinez Cillero & Fiona Thorne, 2019. "Sources of productivity growth using the Färe-Primont decomposition. An empirical application to the Irish beef sector," Applied Economics, Taylor & Francis Journals, vol. 51(36), pages 3982-3994, August.
    • Handle: RePEc:taf:applec:v:51:y:2019:i:36:p:3982-3994
    DOI: 10.1080/00036846.2019.1588944
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    Cited by:

    1. De Jorge-Moreno, Justo & González Santos, Arancha & Vegas Melero, José Jesús & Cepeda Olmedo, Martín, 2021. "Analysis of productivity in the Health Care Centers of the Community of Madrid (Spain) 2015-2017. || Análisis de la productividad en los Centros Sanitarios de la Comunidad de Madrid (España) 2015-2017," Revista de Métodos Cuantitativos para la Economía y la Empresa = Journal of Quantitative Methods for Economics and Business Administration, Universidad Pablo de Olavide, Department of Quantitative Methods for Economics and Business Administration, vol. 31(1), pages 384-396, June.
    2. Kryszak, Łukasz & Herzfeld, Thomas, 2021. "One or many European models of agriculture? How heterogeneity influences income creation among farms in the European Union," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 67(11), pages 445-456.

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