Dynamic Efficiency Measurement: Theory and Application |
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| Authors: | Elvira Silva Spiro E Stefanou |
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| Institution: | Elvira Silva is associate professor, Faculty of Economics, University of Porto, and Spiro E. Stefanou is professor, Department of Agricultural Economics and Rural Sociology, Pennsylvania State University. |
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| Abstract: | Nonparametric dynamic measures of production efficiency are developed in the context of an adjustment-cost technology and intertemporal cost minimization. Bounds on each efficiency measure are derived for each firm using a nonparametric revealed preference approach. Long-run efficiency measures indicate the relative efficiency of both variable and dynamic factors while short-run measures of efficiency indicate whether variable inputs are employed efficiently in the production process. The efficiency measures are temporal in nature by describing the degree of efficiency of the firm at a particular point along its adjustment path. The empirical implementation is illustrated for a balanced panel of Pennsylvania dairy operators during 1986–1992. |
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| Keywords: | economic dynamics efficiency measurement nonparametric production analysis |
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