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A Comparison of Panel Data Models in estimating Technical Efficiency

Author

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  • Rashidghalam, Masoomeh

    (Department of Agricultural Economics,University of Tabriz, Tabriz, Iran)

  • Heshmati, Almas

    (Jönköping International Business School (JIBS), Centre of Excellence for Science and Innovation Studies (CESIS),& Department of Economics, Sogang University, Seoul, South Korea)

  • Dashti, Ghader

    (Department of Agricultural Economics,University of Tabriz, Tabriz, Iran)

  • Pishbahar, Esmail

    (Department of Agricultural Economics,University of Tabriz, Tabriz, Iran)

Abstract

The purpose of this paper is two-fold. First, it compares the performance of various panel data models in estimating technical efficiency in production. Second, it applies various stochastic frontier panel data models to estimate the technical efficiency of Iran’s cotton production and to provide empirical evidence on the sources of technical inefficiency of cotton production using 2000-2012 panel data from Iran's 13 cotton producing provinces. The results indicate that labor and seeds are determinants of cotton production. Further, an investigation of the sources of technical inefficiency reveals that inorganic fertilizers result in reducing technical efficiency. The mean technical efficiency according to most of the models is found to be around 80 per cent. The empirical results show evidence of variations in the distribution of estimated efficiency amongst the different models. We also find a large difference in technical efficiency levels between provinces, which shows that geography and management’s impacts on technical efficiency are quite different among the provinces.

Suggested Citation

  • Rashidghalam, Masoomeh & Heshmati, Almas & Dashti, Ghader & Pishbahar, Esmail, 2016. "A Comparison of Panel Data Models in estimating Technical Efficiency," Working Paper Series in Economics and Institutions of Innovation 433, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    • Handle: RePEc:hhs:cesisp:0433
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    Cited by:

    1. Berisso Oumer & Heshmati Almas, 2020. "Farm-heterogeneity and persistent and transient productive efficiencies in Ethiopia’s smallholder cereal farming," IZA Journal of Development and Migration, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 11(1), pages 1-23, January.
    2. Salvatore Bimonte & Arsenio Stabile, 2019. "The Effect of Growth and Corruption on Soil Sealing in Italy: A Regional Environmental Kuznets Curve Analysis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(4), pages 1497-1518, December.
    3. Dale Squires & Kathleen Segerson, 2022. "Capacity and Capacity Utilization in Production Economics," Springer Books, in: Subhash C. Ray & Robert G. Chambers & Subal C. Kumbhakar (ed.), Handbook of Production Economics, chapter 24, pages 1001-1037, Springer.
    4. Lukáš Čechura & Zdeňka Žáková Kroupová, 2021. "Technical Efficiency in the European Dairy Industry: Can We Observe Systematic Failures in the Efficiency of Input Use?," Sustainability, MDPI, vol. 13(4), pages 1-19, February.

    More about this item

    Keywords

    Technical efficiency; panel data modeling; time-variant; persistent inefficiency; individual heterogeneity; model comparison; cotton production; Iran.;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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