Technical Efficiency of Australian Wool Production: Point and Confidence Interval Estimates

Iain Fraser () and William C. Horrace ()

Public Economics from EconWPA

Abstract: A balanced panel of data is used to estimate technical efficiency, employing a fixed-effects stochastic frontier specification for wool producers in Australia. Both point estimates and confidence intervals for technical efficiency are reported. The confidence intervals are constructed using the Multiple Comparisons with the Best (MCB) procedure of Horrace and Schmidt (2000). The confidence intervals make explicit the precision of the technical efficiency estimates and underscore the dangers of drawing inferences based solely on point estimates. Additionally, they allow identification of wool producers that are statistically efficient and those that are statistically inefficient. The data reveal at the 95% confidence level that twenty-one of the twenty-six wool farms analyzed may be efficient.

Keywords: Wool; Technical Efficiency; MCB; MCC (search for similar items in EconPapers)
JEL-codes: D24 C13 C23 (search for similar items in EconPapers)
Date: 2002-06-19, Revised 2003-05-11
Note: Type of Document - Acrobat PDF; prepared on IBM PC; to print on HP; pages: 34; figures: included/request from author/draw your own. Multiple comparison procedures applied to wool production
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwppe:0206001

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