Heterogeneity, transient and persistent technical efficiency of Polish crop farms

Spanish Journal of Agricultural Research. 2019;17(1):e0106-e0106 DOI 10.5424/sjar/2019171-13926

 

Journal Homepage

Journal Title: Spanish Journal of Agricultural Research

ISSN: 1695-971X (Print); 2171-9292 (Online)

Publisher: Instituto Nacional de Investigación y Tecnología Agraria y Alimentaria

Society/Institution: Instituto Nacional de Investigación y Tecnología Agraria y Alimentaria

LCC Subject Category: Agriculture

Country of publisher: Spain

Language of fulltext: English

Full-text formats available: PDF, HTML, XML

 

AUTHORS


Andrzej Pisulewski (Cracow University of Economics, Dept. of Econometrics and Operational Research, ul. Rakowicka 27, 31-510 Kraków)

Jerzy Marzec (Cracow University of Economics, Dept. of Econometrics and Operational Research, ul. Rakowicka 27, 31-510 Kraków)

EDITORIAL INFORMATION

Blind peer review

Editorial Board

Instructions for authors

Time From Submission to Publication: 36 weeks

 

Abstract | Full Text

Accounting for heterogeneity in the measurement of farm efficiency is crucial to avoid biases related to climate and soil quality diversity in a given area. Therefore, this paper investigates the level of technical efficiency (TE) of Polish crop farms based on several stochastic frontier panel data models with different approaches to the measurement of unobserved heterogeneity, short- and long- run inefficiency. In our study, we show that ignoring farm heterogeneity can lead to underestimation of the level of TE in conventional stochastic frontier panel data models. Moreover, we have found empirically that not accounting for heterogeneity in the Generalized True Random Effects model may lead to incorrect estimates of persistent TE. The obtained results for Polish crop farms indicate that the level of transient TE (0.81) is lower than the level of persistent TE (0.88). This result suggests that Polish farms may have, for example, problems with adopting new technologies and poor managerial skills.