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Input Usage, Ouput Mix and Industry Deregulation: An Analysis of the Australian Dairy Manufacturing Industry

Author

Listed:
  • Kevin Balcombe
  • Hristos Doucouliagos
  • Iain Fraseer

Abstract

In this paper we estimate a Translog output distance function for a balanced panel of state level data for the Australian dairy processing sector. We estimate a fixed effects specification employing Bayesian methods, with and without the imposition of monotonicity and curvature restrictions. Our results indicate that Tasmania and Victoria are the most technically efficient states with New South Wales being the least efficient. The imposition of theoretical restrictions marginally affects the results especially with respect to estimates of technical change and industry deregulation. Importantly, our bias estimates show changes in both input use and output mix that result from deregulation. Specifically, we find that deregulation has positively biased the production of butter, cheese and powders.

Suggested Citation

  • Kevin Balcombe & Hristos Doucouliagos & Iain Fraseer, 2006. "Input Usage, Ouput Mix and Industry Deregulation: An Analysis of the Australian Dairy Manufacturing Industry," Working Papers 2006_27, Deakin University, Department of Economics.
    • Handle: RePEc:dkn:econwp:eco_2006_27
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    File URL: http://www.deakin.edu.au/buslaw/aef/workingpapers/papers/2006_27eco.pdf
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