Integrating spatial dependence into Stochastic Frontier Analysis

Francisco Areal · Kelvin Balcombe · Richard Tiffin

96 citations0/0 files storedAustralian Journal of Agricultural and Resource Economics

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Efficiency Analysis Using DEA Agricultural economics and policies Spatial and Panel Data Analysis

Abstract

An approach to incorporate spatial dependence into stochastic frontier analysis is developed and applied to a sample of 215 dairy farms in England and Wales. A number of alternative specifications for the spatial weight matrix are used to analyse the effect of these on the estimation of spatial dependence. Estimation is conducted using a Bayesian approach and results indicate that spatial dependence is present when explaining technical inefficiency.

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References

1988Spatial Econometrics: Methods and Models 1974Spatial Interaction and the Statistical Analysis of Lattice Systems 1954ON STATIONARY PROCESSES IN THE PLANE 1975Estimation Methods for Models of Spatial Interaction 2002Under the hood Issues in the specification and interpretation of spatial regression models 2003Measuring the benefits of air quality improvement: a spatial hedonic approach 1999A comparison of parametric and non-parametric distance functions: With application to European railways 1994Stochastic frontier models

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