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The concept of technical efficiency is critical to measuring the firm performance,determining the degree of innovative technology adoption and the overall productionefficiency. Traditionally, technical efficiency has been measured as the ratio of observedoutput to maximum feasible output. Stochastic frontier models have been widelyutilized to assess this issue. Our research evaluates technical efficiencies in the Spanisholive sector. Specifically, the main objective of this study is to estimate a stochasticfrontier production model by using a farm- level panel of data. The non- negativetechnical efficiency effects are assumed to be a function of firm- specific variables. Asample of Spanish farms observed from 1999 to 2002 is obtained from the FADNdataset and used in the estimation of the model. Maximum- likelihood methods areapplied in the estimation of the parameters of the model. A primal approach is used todecompose Total Factor Productivity (TFP) growth. Results indicate that farm location,age of manager, tenure regimes of land and whether the farm has adopted organicfarming techniques affect efficiency levels . Technical efficiency change, allocativeefficiencies and scale effects are found to be the main sources of TFP growth, whiletechnical change seems to be of minor importance. Results also suggest that Spanisholive farms are less efficient relative to other EU farms. This suggests that improvementsin the Spanish olive productive capacity after the accession to the EU were not fullyimplemented in the period of analysis. This may be due to a decline in olive farmincomes as a result of a decline in both public subsidies and in output prices after themid 1990s.

Subject(s): Crop Production/Industries

Productivity Analysis

Issue Date: 2006

Publication Type: Conference Paper/ Presentation

PURL Identifier:

Total Pages: 26

Series Statement: Seminar Paper

Record appears in: European Association of Agricultural Economists (EAAE) > 98th Seminar, June 29-July 2, 2006, Chania, Crete, Greece

Autor: Lambarraa, Fatima ; Serra, Teresa ; Gil Roig, Jose Maria


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