IDEAS home Printed from https://ideas.repec.org/a/wly/agribz/v39y2023i3p727-743.html
   My bibliography  Save this article

Regional technical efficiency rankings and their determinants in the Irish dairy industry: A stochastic meta‐frontier analysis

Author

Listed:
  • Lungelo P. Cele
  • Thia Hennessy
  • Fiona Thorne

Abstract

The paper aims to evaluate regional farm efficiency rankings for Ireland which seeks to be a leader in the global dairy industry. It conducts a within‐country analysis based on technical and scale efficiency of dairy farms to explore how regional constraints imposed by the milk quota may have affected Ireland's regional farm efficiency levels. The stochastic meta‐frontier approach is adopted because of its usefulness in comparing regional technical efficiencies. The findings suggest that policies aiming to promote labor and soil quality improvement in the East region, and that relate to discussion groups in the South region, in addition to management of herd size, would be useful for improving efficiency postquota. Moreover, some farms expanded beyond their optimal scale leading to a reduction in efficiency levels and this points to the need to tailor farm advice and promote caution and prudence in farm expansion decisions, especially in a region like South West. [EconLit Citations: D22, D24, L25, Q1, R1, R58].

Suggested Citation

  • 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.
    • Handle: RePEc:wly:agribz:v:39:y:2023:i:3:p:727-743
    DOI: 10.1002/agr.21791
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/agr.21791
    Download Restriction: no
    File URL: https://libkey.io/10.1002/agr.21791?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Carol Newman & Alan Matthews, 2006. "The productivity performance of Irish dairy farms 1984–2000: a multiple output distance function approach," Journal of Productivity Analysis, Springer, vol. 26(2), pages 191-205, October.
    2. Amsler, Christine & Prokhorov, Artem & Schmidt, Peter, 2016. "Endogeneity in stochastic frontier models," Journal of Econometrics, Elsevier, vol. 190(2), pages 280-288.
    3. Cliff Huang & Tai-Hsin Huang & Nan-Hung Liu, 2014. "A new approach to estimating the metafrontier production function based on a stochastic frontier framework," Journal of Productivity Analysis, Springer, vol. 42(3), pages 241-254, December.
    4. Awudu Abdulai & Hendrik Tietje, 2007. "Estimating technical efficiency under unobserved heterogeneity with stochastic frontier models: application to northern German dairy farms," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 34(3), pages 393-416, September.
    5. Maria Martinez Cillero & Michael Wallace & Fiona Thorne & James Breen, 2021. "Analyzing the Impact of Subsidies on Beef Production Efficiency in Selected European Union Countries. A Stochastic Metafrontier Approach," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(5), pages 1903-1923, October.
    6. Habtamu Alem & Gudbrand Lien & J. Brian Hardaker & Atle Guttormsen, 2019. "Regional differences in technical efficiency and technological gap of Norwegian dairy farms: a stochastic meta-frontier model," Applied Economics, Taylor & Francis Journals, vol. 51(4), pages 409-421, January.
    7. 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.
    8. Mustafa U. Karakaplan & Levent Kutlu, 2017. "Handling Endogeneity in Stochastic Frontier Analysis," Economics Bulletin, AccessEcon, vol. 37(2), pages 889-901.
    9. Theodore Tsekeris & Sotiris Papaioannou, 2018. "Regional determinants of technical efficiency: evidence from the Greek economy," Regional Studies, Taylor & Francis Journals, vol. 52(10), pages 1398-1409, October.
    10. Nan Jiang & Basil Sharp, 2015. "Technical efficiency and technological gap of New Zealand dairy farms: a stochastic meta-frontier model," Journal of Productivity Analysis, Springer, vol. 44(1), pages 39-49, August.
    11. Kumbhakar,Subal C. & Wang,Hung-Jen & Horncastle,Alan P., 2015. "A Practitioner's Guide to Stochastic Frontier Analysis Using Stata," Cambridge Books, Cambridge University Press, number 9781107029514, October.
    12. Shrestha, Shailesh & Hennessy, Thia C., 2008. "A prospect of moving towards free milk quota market in Ireland – will milk quota movement follow efficiency?," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 43657, European Association of Agricultural Economists.
    13. 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.
    14. Kelly, E & Shalloo, L & Geary, U & Kinsella, A. & Thorne, F & Wallace, M, 2013. "An analysis of the factors associated with technical and scale efficiency of Irish dairy farms," International Journal of Agricultural Management, Institute of Agricultural Management, vol. 2(3), pages 1-11, April.
    15. James Carroll & Carol Newman & Fiona Thorne, 2011. "A comparison of stochastic frontier approaches for estimating technical inefficiency and total factor productivity," Applied Economics, Taylor & Francis Journals, vol. 43(27), pages 4007-4019.
    16. Tran, Kien C. & Tsionas, Efthymios G., 2015. "Endogeneity in stochastic frontier models: Copula approach without external instruments," Economics Letters, Elsevier, vol. 133(C), pages 85-88.
    17. Greene, William, 2005. "Reconsidering heterogeneity in panel data estimators of the stochastic frontier model," Journal of Econometrics, Elsevier, vol. 126(2), pages 269-303, June.
    18. Mustafa U. Karakaplan & Levent Kutlu, 2019. "School district consolidation policies: endogenous cost inefficiency and saving reversals," Empirical Economics, Springer, vol. 56(5), pages 1729-1768, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wanglin Ma & Kathryn Bicknell & Alan Renwick, 2019. "Feed use intensification and technical efficiency of dairy farms in New Zealand," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 63(1), pages 20-38, January.
    2. Orea, Luis, 2019. "The Econometric Measurement of Firms’ Efficiency," Efficiency Series Papers 2019/02, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
    3. Kutlu, Levent & Nair-Reichert, Usha, 2022. "Executive compensation and the potential for additional efficiency gains: Evidence from the Indian manufacturing sector," Economic Modelling, Elsevier, vol. 114(C).
    4. Kutlu, Levent & Tran, Kien C. & Tsionas, Mike G., 2019. "A time-varying true individual effects model with endogenous regressors," Journal of Econometrics, Elsevier, vol. 211(2), pages 539-559.
    5. Kutlu, Levent & Tran, Kien C. & Tsionas, Mike G., 2020. "A spatial stochastic frontier model with endogenous frontier and environmental variables," European Journal of Operational Research, Elsevier, vol. 286(1), pages 389-399.
    6. Mamonov Mikhail E. & Parmeter Christopher F. & Prokhorov Artem B., 2022. "Dependence modeling in stochastic frontier analysis," Dependence Modeling, De Gruyter, vol. 10(1), pages 123-144, January.
    7. Maria Martinez Cillero & Michael Wallace & Fiona Thorne & James Breen, 2021. "Analyzing the Impact of Subsidies on Beef Production Efficiency in Selected European Union Countries. A Stochastic Metafrontier Approach," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(5), pages 1903-1923, October.
    8. Guarini, Giulio & Laureti, Tiziana & Garofalo, Giuseppe, 2020. "Socio-institutional determinants of educational resource efficiency according to the capability approach: An endogenous stochastic frontier analysis," Socio-Economic Planning Sciences, Elsevier, vol. 71(C).
    9. Zarkovic, Maja, 2020. "Cap-and-trade and produce at least cost? Investigating firm behaviour in the EU ETS," Working papers 2020/12, Faculty of Business and Economics - University of Basel.
    10. Toba Stephen Olasehinde & Fangbin Qiao & Shiping Mao, 2022. "Performance of Nigerian Rice Farms from 2010 to 2019: A Stochastic Metafrontier Approach," Agriculture, MDPI, vol. 12(7), pages 1-13, July.
    11. 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.
    12. Mustafa U. Karakaplan & Levent Kutlu, 2019. "Estimating market power using a composed error model," Scottish Journal of Political Economy, Scottish Economic Society, vol. 66(4), pages 489-510, September.
    13. Julien, Jacques C. & Bravo-Ureta, Boris E. & Rada, Nicholas E., 2023. "Gender and agricultural Productivity: Econometric evidence from Malawi, Tanzania, and Uganda," World Development, Elsevier, vol. 171(C).
    14. Abebayehu Girma Geffersa & Frank Wogbe Agbola & Amir Mahmood, 2022. "Modelling technical efficiency and technology gap in smallholder maize sector in Ethiopia: accounting for farm heterogeneity," Applied Economics, Taylor & Francis Journals, vol. 54(5), pages 506-521, January.
    15. Subal C. Kumbhakar & Christopher F. Parmeter & Valentin Zelenyuk, 2022. "Stochastic Frontier Analysis: Foundations and Advances I," Springer Books, in: Subhash C. Ray & Robert G. Chambers & Subal C. Kumbhakar (ed.), Handbook of Production Economics, chapter 8, pages 331-370, Springer.
    16. Cathal O'Donoghue & Thia Hennessy, 2015. "Policy and Economic Change in the Agri-Food Sector in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 46(2), pages 315-337.
    17. Mustafa U. Karakaplan & Levent Kutlu, 2019. "School district consolidation policies: endogenous cost inefficiency and saving reversals," Empirical Economics, Springer, vol. 56(5), pages 1729-1768, May.
    18. Amsler, Christine & Prokhorov, Artem & Schmidt, Peter, 2017. "Endogenous environmental variables in stochastic frontier models," Journal of Econometrics, Elsevier, vol. 199(2), pages 131-140.
    19. 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).
    20. 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.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:agribz:v:39:y:2023:i:3:p:727-743. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.