Bias Free Measurement of Technical Efficiency
Date
2006
Authors
Bhide, Shashanka
Kalirajan, Kaliappa
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Volume Title
Publisher
Routledge, Taylor & Francis Group
Abstract
Technical efficiency, which is a measure of production performance of a firm, has been estimated generally using a primal production frontier. Since the estimation is carried out for a given level of inputs, the efficiency measure includes the effect of 'input-mix' or 'input-allocation' and consequently, the technical efficiency estimate is biased. The objectives of this paper are to gauge the magnitude of 'input-mix' bias in technical efficiency estimate and to suggest a method to measure technical efficiency eliminating the bias. The workability of the suggested method is demonstrated through an empirical analysis using agricultural data from India covering the period 1970-1993.
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Keywords
Keywords: Frontier production function; India; Input-mix bias; Technical efficiency
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Source
Journal of Applied Statistics
Type
Journal article
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2037-12-31
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