TY - JOUR
T1 - Bias free measurement of technical efficiency
AU - Kalirajan, Kaliappa
AU - Bhide, Shashanka
PY - 2006/6
Y1 - 2006/6
N2 - Technical efficiency, which is a measure of production performance of a firm, has been estimated generally using a primal production frontier. Since the estimation is carried out for a given level of inputs, the efficiency measure includes the effect of 'input-mix' or 'input-allocation' and consequently, the technical efficiency estimate is biased. The objectives of this paper are to gauge the magnitude of 'input-mix' bias in technical efficiency estimate and to suggest a method to measure technical efficiency eliminating the bias. The workability of the suggested method is demonstrated through an empirical analysis using agricultural data from India covering the period 1970-1993.
AB - Technical efficiency, which is a measure of production performance of a firm, has been estimated generally using a primal production frontier. Since the estimation is carried out for a given level of inputs, the efficiency measure includes the effect of 'input-mix' or 'input-allocation' and consequently, the technical efficiency estimate is biased. The objectives of this paper are to gauge the magnitude of 'input-mix' bias in technical efficiency estimate and to suggest a method to measure technical efficiency eliminating the bias. The workability of the suggested method is demonstrated through an empirical analysis using agricultural data from India covering the period 1970-1993.
KW - Frontier production function
KW - India
KW - Input-mix bias
KW - Technical efficiency
UR - http://www.scopus.com/inward/record.url?scp=33646516594&partnerID=8YFLogxK
U2 - 10.1080/02664760600585592
DO - 10.1080/02664760600585592
M3 - Article
SN - 0266-4763
VL - 33
SP - 523
EP - 533
JO - Journal of Applied Statistics
JF - Journal of Applied Statistics
IS - 5
ER -