The empirical identification of heterogeneous technologies and technical change

Johannes Sauer and Catherine Morrison Paul

Applied Economics, 2013, vol. 45, issue 11, 1461-1479

Abstract: When different technologies are present in an industry, we assume that a homogeneous technology will lead to misleading implications about technical change and inefficient policy recommendations. In this article a latent class modelling approach and flexible estimation of the production structure is used to distinguish different technologies for a representative sample of EU dairy producers, as an industry exhibiting significant structural changes and differences in production systems in the past decades. The model uses a transformation function to recognize multiple outputs; separate technological classes based on multiple characteristics, a flexible generalized linear functional form, a variety of inputs and random effects to capture firm heterogeneity; and measures of first- and second-order elasticities to represent technical change and biases. We find that if multiple production frontiers are embodied in the data, different firms exhibit different output or input intensities and changes associated with different production systems that are veiled by overall (average) measures. In particular, we find that farms that are larger and more capital intensive experience greater productivity, technical progress and labour savings, and enjoy scale economies that have increased over time.

Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (28)

Downloads: (external link)
http://hdl.handle.net/10.1080/00036846.2011.617704 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:applec:45:y:2013:i:11:p:1461-1479

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/00036846.2011.617704

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().