Vangelis Tzouvelekas

Technology Adoption under Production Uncertainty: Theory and Application to Irrigation Technology

We propose a theoretical framework to analyze the conditions under which a farmer facing production uncertainty (due to a possible water shortage) and incomplete information will adopt a more efficient irrigation technology. A reduced form of this model is empirically estimated using a sample of 265 farms located in Crete, Greece. The empirical results suggest that farmers choose to adopt the new technology in order to hedge against production risk. In addition, we show that the farmers human capital also plays a significant role in the decision to adopt modern, more efficient irrigation equipment.

Technical efficiency of alternative farming systems: the case of Greek organic and conventional olive-growing farms

Abstract Olive-growing is a major farming activity in Greek agriculture. This paper analyzes empirically the technical efficiency of organic and conventional olive-growing farms using a stochastic production frontier methodology and a translog functional specification. Findings indicate that the organic olive-growing farms examined exhibit a higher degree of technical efficiency (relative to their production frontier) than do conventional olive-growing farms. Reasons may include lower profit margins and restrictions on inputs permitted, thus forcing organic farmers to be more cautious with input use. However, both input- and output-oriented technical efficiency scores are still relatively low for both types of olive-farming. Thus there is considerable scope for cost reducing and farm income improvement in both farming modes. This could prove crucial for the long-run viability and the future course of the sector.

Information Transmission in Irrigation Technology Adoption and Diffusion: Social Learning, Extension Services, and Spatial Effects

In this article, we investigate the role of information transmission in promoting agricultural technology adoption and diffusion through extension services and social learning. We develop a theoretical model of technology adoption and diffusion, which we then empirically apply, using duration analysis, on a micro-dataset consisting of recall data covering the period 1994-2004 for olive-producing farms from Crete, Greece. Our findings suggest that both extension services and social learning are strong determinants of technology adoption and diffusion, while the effectiveness of each of the two informational channels is enhanced by the presence of the other.

An analysis of EU wine trade: A gravity model approach

In this research study, a gravity model approach was used in order to analyze the main factors affecting the trade flows of wine in the EU. The empirical model was applied using data for the first twelve EU countries for the period 1989–97. It has been clearly shown in the empirical literature that gravity models can be successfully applied to a single commodity market. The present study utilized pooled cross-sectional and time series data in a one-way fixed effects model that accounted for country-pair heterogeneity. The results revealed that wine trade was positively influenced by an increase in GDP per capita, since greater income promotes trade. The remoteness of one country from another influenced exports positively and imports negatively, and the quantities traded did not prove to be very sensitive to wine prices. The depreciation of EU currencies and the high production of wine in the EU increased exports and reduced imports, while EU integration enhanced trade among members.

Parametric Decomposition of Output Growth Using A Stochastic Input Distance Function

This article proposes a tractable approach for analyzing the sources of TFP changes (i.e., technical change, changes in technical and allocative inefficiency, and the scale effect) in a multi-output setting, while retaining the single-equation nature of the econometric procedure used to estimate the parameters of the underlying technology. The proposed approach relies on Bauers cost function-based decomposition of TFP changes and the duality between input distance and cost functions. The empirical results are based on a sample of 121 UK livestock farms observed over the period 1983–92 and a translog input distance function. Copyright 2004, Oxford University Press.

Efficiency, technological change and output growth in Greek olive growing farms: a Box-Cox approach

This paper captures the relative contributions of input growth, technological change and technical efficiency to olive oil production growth for a panel data set of 125 Greek olive-growing farms for the period 1987 to 1993. A flexible generalized quadratic Box-Cox functional form is proposed to represent the underlying production technology. This functional specification copes with the problem of zero inputs and nests all widely used production frontiers. Empirical results show that the observed production growth is mainly due to increased input use since it was not accompanied by rapid introduction of technological innovations and improvements in efficiency levels.

Separating Technical Change from Time-Varying Technical Inefficiency in the Absence of Distributional Assumptions

This paper proposes an alternative model for separating technical change from time-varying technical inefficiency. The proposed formulation uses the general index, developed by Baltagi and Griffin (1988), to model technical change in the production frontier function and a quadratic function of time, as in Cornwell, Schmidt and Sickles (1990), to capture the temporal pattern of technical inefficiency. In such a setting, all parameters associated with the rate of technical change and the temporal pattern of technical inefficiency are identified separately. Moreover, the proposed formulation is independent of any distributional assumption concerning the one-sided error term associated with technical inefficiency, and it can be estimated in a single stage with non-linear FGLS. Empirical results based on a translog production frontier, and estimates of technical inefficiency and technical change are presented for the UK dairy sector over the period 1982–1992.

Measuring multiple and single factor technical efficiency in organic farming

Estimates the output‐oriented and input‐specific technical efficiency in two samples of Greek, durum wheat farms – organic and conventional ones – using Kalirajan and Obwona’s stochastic varying coefficient regression model. Findings indicate that the organic wheat farms examined are relatively more efficient. Reasons may include lower profit margins and restrictions on inputs permitted, which may force organic farmers to be more cautious with input use. However, technical efficiency scores are still relatively low for both types of wheat farming. Therefore, considerable scope for cost reducing and farm income improvement may exist in both farming modes. This realization could prove crucial for the long‐run viability and the future course of organic wheat farming.

SELF-DUAL STOCHASTIC PRODUCTION FRONTIERS AND DECOMPOSITION OF OUTPUT GROWTH: THE CASE OF OLIVE-GROWING FARMS IN GREECE

This paper provides a decomposition of output growth among olive-growing farms in Greece during the period 1987–1993 by integrating Bauers (1990) and Bravo-Ureta and Riegers (1991) approaches. The proposed methodology is based on the use of self-dual production frontier functions. Output growth is attributed to the size effect, technical change, changes in technical and input allocative inefficiency, and the scale effect. Empirical results indicate that the scale and the input allocative inefficiency effects, which were not taken into account in previous studies on output growth decomposition analysis, have caused a 7.3% slowdown and a 11.0% increase in output growth, respectively. Technical change was found to be the main source of TFP growth while both technical and input allocative inefficiency decreased over time. Still though, a 56.5% of output growth is attributed to input growth.

Military Spending and the Growth-Maximizing Allocation of Public Capital: A Cross-Country Empirical Analysis

In this paper we present an endogenous growth model to analyze the growth maximizing allocation of public investment among N different types of public capital. Using this general model of public capital formation, we analyze the stability of the long‐run equilibrium and we derive the growth‐maximizing values of the shares of public investment allocated to the different types of public capital, as well as the growth‐maximizing tax rate (amount of total public investment as a share of GDP). Then we proceed with an empirical investigation of the theoretical implication of the model that both the effects of the shares of public investment and the tax rate on the long‐run growth rate are non‐linear, following an inverse U‐shaped pattern. Using data of public investment in infrastructure and military capital formation, we derive empirical estimations that confirm the theoretical implications of the model.