Measuring Regional Productivity Differences in the Australian Wool Industry: A Metafrontier Approach

Using panel data, we estimate technology gaps for four distinct sheep-producing regions in Eastern Australia (Northern New South Wales, Central and South-Eastern New South Wales, South-Western New South Wales and South-West Victoria) that reflect spatial environmental and technological differences in wool production. A deterministic stochastic metafrontier production function model is estimated that envelops the stochastic frontiers of the four regions. This metafrontier approach enables us to estimate the environment-technology gap ratio that reflects these spatial differences in the environment and variations in production technologies in the wool enterprise for benchmarked farmers in each region. As a result, a more accurate estimation is possible of changes in total factor productivity on farms in the different regions. The major findings are that environment-technology gaps do exist between regions but they are relatively small. Greater variation is apparent within regions. Variation in technical efficiency seems to depend on the harshness of the production environment and whether consultancy advice is regularly received by the benchmarking group.


Issue Date:
2008
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/6036
Total Pages:
16
Series Statement:
Conference Paper




 Record created 2017-04-01, last modified 2017-08-23

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