Frontier technology and inefficiencies in programming sector models: An application to Swedish agriculture

Lars Jonasson, Jeffrey Apland

Research output: Contribution to journalArticlepeer-review

9 Scopus citations

Abstract

A new approach to sector modelling with mathematical programming is proposed. The approach is based on information received from nonparametric efficiency analysis of farm data. Efficient farms are used to construct a set of empirically based, multi-input, multi-output technologies in the sector model. To further improve the depiction of production in the model, observed inefficiencies are also incorporated. An application of the technique replicates base-year observations better than a traditional model. Further, the new model has less tendency towards over-specialisation and unrealistic jumps in the price response. By explicitly taking existing structural inefficiencies into account, the model provides indications of the direction and strength of incentives for structural change.

Original languageEnglish (US)
Pages (from-to)109-131
Number of pages23
JournalEuropean Review of Agricultural Economics
Volume24
Issue number1
DOIs
StatePublished - 1997

Keywords

  • Efficiency
  • Farm structure
  • Mathematical programming
  • Sector model

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