Nonparametric measurement of the overall shift in the technology frontier: an application to multiple-output agricultural production data in the Brazilian Amazon

This article develops a simple, but informative, approach to measure technical changes by applying the Malmquist index framework using data envelopment analysis (DEA). A set of directional vectors is used to capture complete information regarding the overall shift in the technology frontier; we then...

Full description

Saved in:
Bibliographic Details
Published inEmpirical economics Vol. 44; no. 3; pp. 1455 - 1475
Main Author Otsuki, Tsunehiro
Format Journal Article
LanguageEnglish
Published Berlin/Heidelberg Springer-Verlag 01.06.2013
Springer Nature B.V
Subjects
Agricultural economics
Agricultural production
Data envelopment analysis
Econometrics
Economic models
Economic statistics
Economic theory
Economic Theory/Quantitative Economics/Mathematical Methods
Economics
Economics and Finance
Finance
Insurance
Management
Operations research
Productivity
Statistics for Business
Studies
Brazil
Amazon Basin
Technical change
Malmquist index
Circularity test
D24
Sample independence
Directional vectors
O30
Data envelopment analysis
C61
Online AccessGet full text

Cover

More Information
Summary:This article develops a simple, but informative, approach to measure technical changes by applying the Malmquist index framework using data envelopment analysis (DEA). A set of directional vectors is used to capture complete information regarding the overall shift in the technology frontier; we then visualize the DEA frontiers in the output space. This approach deals with the problems of sample dependence and non-circularity of technical change measures. It allows us to measure output-by-output technical change. Furthermore, the geometric mean of the technical change measures derived using this approach satisfies circularity. The application of Malmquist indices to the panel datasets of agricultural production in the Brazilian Amazon during the period 1975–1995 indicates a non-Hicks-neutral technical change, with intersection of frontiers during both the 1975–1985 and the 1985–1995 sub-periods. We find moderate progress in cattle production and annual crops, and a decline in perennial crops (bananas). Technological progress is a modest 0.7% during the period 1975–1995 on average. In addition, comparisons with the sample-dependent measures in the preceding studies demonstrate that these indices are usually sensitive to the distribution of actual sampled data points.
ISSN:0377-7332
1435-8921
DOI:10.1007/s00181-012-0582-4