Two-part fractional regression model with conditional FDH responses: an application to Brazilian agriculture

Geraldo Souza (), Eliane Gonçalves Gomes () and Eliseu Roberto Alves ()
Additional contact information
Geraldo Souza: Universidade de Brasília
Eliane Gonçalves Gomes: Embrapa
Eliseu Roberto Alves: Embrapa

Annals of Operations Research, 2022, vol. 314, issue 2, No 5, 393-409

Abstract: Abstract We extend the notion of a two-part fractional regression model with conditional free disposal hull efficiency responses to accommodate two-stage regression analysis. The two-part regression model includes the binomial model with a nonlinear specification for the expected response in (0,1] and is a more general formulation in the context of fractional regressions. We use nonlinear least squares to assess the effect of covariates in the conditional efficiency response. The approach is applied to Brazilian agricultural county data, as reported in the Brazilian agricultural census of 2006. The efficiency measure is output oriented and assumes variable returns to scale. Output is rural gross income and inputs are land expenses, labor expenses and expenses on other technological inputs. The covariates affecting production are credit, technical assistance, a rural development index, income concentration, measured by the Gini index, and regional dummies. Overall Brazilian rural production performance responds positively to all covariates.

Keywords: Agriculture; Conditional free disposal hull; Fractional regression (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s10479-020-03752-z

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