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Efficiency Measures Using the Ray-Homothetic Function: A Multiperiod Analysis

Published online by Cambridge University Press:  05 September 2016

David L. Neff,
Philip Garcia and
Robert H. Hornbaker
David L. Neff
Affiliation:
Department of Agricultural Economics and Rural Sociology, University of Arkansas at Fayetteville
Philip Garcia
Affiliation:
Department of Agricultural Economics, University of Illinois at Urbana-Champaign
Robert H. Hornbaker
Affiliation:
Department of Agricultural Economics, University of Illinois at Urbana-Champaign
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Abstract

Recent investigations have provided mixed assessments of farm firm efficiency. This analysis examined the efficiency of a homogeneous sample of central Illinois grain farms over a six-year period. A best-practice frontier was constructed using the ray-homothetic function, which allowed optimal farm output to vary with factor intensity. Efficiency measures were found to increase with temporal aggregation. The ray-homothetic approach was found to attribute high scale inefficiencies to larger sample farms in cases where the factor shares did not vary appreciably across farms. The findings suggest that policy recommendations regarding farm efficiency must be made with care.

Keywords

technical efficiencyray-homothetic functiontemporal aggregationIllinois grain farms

Information

Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 23 , Issue 2 , December 1991, pp. 113 - 122
Copyright
Copyright © Southern Agricultural Economics Association 1991

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