Integrating spatial dependence into Stochastic Frontier Analysis |
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Authors: | Francisco José Areal Kelvin Balcombe Richard Tiffin |
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Abstract: | An approach to incorporate spatial dependence into stochastic frontier analysis is developed and applied to a sample of 215 dairy farms in England and Wales. A number of alternative specifications for the spatial weight matrix are used to analyse the effect of these on the estimation of spatial dependence. Estimation is conducted using a Bayesian approach and results indicate that spatial dependence is present when explaining technical inefficiency. |
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Keywords: | Bayesian spatial dependence spatial weight matrix technical efficiency |
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