Files
Abstract
This paper investigates the technical efficiency of Polish dairy farms producing environmental
output using the stochastic ray function to model multi-output – multi-input technology. Two
general models are considered. One which neglects the provision of environmental output
and one which accounts for such output. The main focus is on the estimation of technical
efficiency of farms producing the environmental output. Since some farms do not provide
such output at all, the stochastic ray frontier functions are estimated to overcome the problem
of the zero valued dependent variables which often occur when the Translog output distance
function is used. The detailed results of the technical efficiency analysis show that, although
the estimated efficiencies from the models which neglect the environmental output and those
which account for the output are rather similar on average, the rankings based on these
efficiencies differ.