Grigorios Emvalomatis

A Reduced-Form Model for Dynamic Efficiency Measurement: Application to Dairy Farms in Germany and The Netherlands

The stochastic distance function model is extended to allow for the inefficiency component of the error term to be autocorrelated, as implied by a dynamic model of firm behavior. The autocorrelation parameter can then be interpreted as a measure of the persistence of inefficiency. The model is viewed from a state-space perspective, and Kalman filtering techniques are proposed for estimation. The model is applied to two panels of dairy farms from Germany and the Netherlands. The results suggest a very high degree of persistence of inefficiency through time. Copyright 2010, Oxford University Press.

Industrial concentration and price-cost margin of the Indonesian food and beverages sector

This article investigates trends in industrial concentration and its relationship with the price-cost margin in 54 subsectors of the Indonesian food and beverages sector in the period 1995 to 2006. This study uses firm-level survey data provided by the Indonesian Bureau of Central Statistics (BPS), classified at the five-digit International Standard Industrial Classification (ISIC) Level. The results show a significant increase in industrial concentration in 1995 to 1999, which coincided with the period of the economic crisis in Indonesia. After 1999, the industrial concentration exhibits a slightly decreasing long-term trend. Furthermore, the industrial concentration for all subsectors tends to converge to the same value in the long run. Additionally, results show that higher industrial concentration yields a higher price-cost margin. Finally, the introduction of the competition law in 1999 has slightly lowered industrial concentration and the price-cost margin.

Estimating shadow prices and efficiency analysis of productive inputs and pesticide use of vegetable production

This paper analyzes technical efficiency and the value of the marginal product of productive inputs vis-a-vis pesticide use to measure allocative efficiency of pesticide use along productive inputs. We employ the data envelopment analysis framework and marginal cost techniques to estimate technical efficiency and the shadow values of each input. A bootstrap technique is applied to overcome the limitations of DEA and helps to estimate the mean and 95 percent confidence intervals of the estimated quantities. The methods are applied to a sample of vegetable producers in Benin over the period 2009–2010. Results indicated that bias corrected technical efficiency scores are lower than the initial measures and the former estimates are statistically significant. The application results show that vegetable producers are less efficient with respect to pesticide use than other inputs. Also, results suggest that pesticides, land and fertilizers are overused.

Heterogeneity of Long-run Technical Efficiency of German Dairy Farms: A Bayesian Approach*

In parametric efficiency studies, two alternative approaches exist to provide an estimate of the long†run efficiency of firms: the dynamic stochastic frontier model and the generalised true random†effects model. We extend the former in order to allow for heterogeneity in the long†run technical efficiency of firms. This model is based on potential differences in firm†specific characteristics and in firms’ inefficiency persistence. The model is applied to an unbalanced micro†panel of German dairy farms over the period 1999 to 2009. Estimation of long†run technical efficiency and inefficiency persistence is based on an output distance function representation of the production technology and estimated in a Bayesian framework. The results suggest that heterogeneity in long†run technical efficiency of farms is mostly attributed to discrepancies in farm†specific factors rather than differences in farms’ inefficiency persistence. Farm size is positively related to long†run technical efficiency while subsidies exert a negative effect on the long†run technical efficiency of farms. Inefficiency persistence is found to be very high, but heterogeneity in this persistence is low.

Productivity growth measurement and decomposition under a dynamic inefficiency specification: The case of German dairy farms

Abstract Standard parametric models for efficiency and total factor productivity growth measurement either impose strict structures on the time-evolution of efficiency scores or no structure at all. When the data capture a sector in turbulent periods both specifications may be inappropriate. The dynamic stochastic frontier model takes a middle way in terms of the time-structure it imposes on efficiency scores. We apply the dynamic stochastic frontier model to the case of German dairy farms in a period that is characterized by high milk price volatility. The model is able to capture time-specific efficiency and total factor productivity growth shocks that may have been induced by this high volatility. Furthermore, the dynamic stochastic frontier model is favored by the data when compared to a model that imposes a very restrictive time structure on efficiency and two models that do not impose any time structure at all.