Bias Free Measurement of Technical Efficiency

Date

2006

Authors

Bhide, Shashanka
Kalirajan, Kaliappa

Journal Title

Journal ISSN

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.

Description

Keywords

Keywords: Frontier production function; India; Input-mix bias; Technical efficiency

Citation

Source

Journal of Applied Statistics

Type

Journal article

Book Title

Entity type

Access Statement

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Restricted until

2037-12-31