Probabilistic productive technology model and partial production frontiers : an applicationfor Lithuanian agriculture

Tomas Balezentis, Alvydas Balezentis

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Abstract

The paper presents the non-parametric benchmarking technique, viz. Free Disposal Hull (FDH), along with its probabilistic extensions. Indeed, the frontier methods are rather sensitive to outliers. The probabilistic methodology, therefore, is useful when handling the practical problems of benchmarking. The paper aimed at analysing the patterns of efficiency of Lithuanian family farms with respect to the uncertain data. The latter aim was achieved by the virtue of the probabilistic production functions. The sensitivity of the efficiency scores estimated for the Lithuanian family farms was analysed by manipulating the numbers of randomly drawn benchmark observation estimations and thus constructing respective order—m frontiers. The livestock farms appeared to be the most efficient, or even super-efficient, independent of the model orientation or the order of the frontier. The application o f the order-alpha frontier also confirmed these results.
Original languageEnglish
Pages (from-to)141-146
JournalJournal of young scientists
Issue number1
Publication statusPublished - 2014

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Keywords

  • Efficiency
  • Family farms
  • Partial frontier

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