Metafrontier Functions for the Study of Interregional Productivity Differences

D.S. Prasada Rao and Christopher J. O'Donnell
School of Economics, University of Queensland, Brisbane
George E. Battese (presenter) School of Economics, University of New England, Armidale

Abstract

This paper uses the concept of the metafrontier function to study regional differences in production technologies. The paper has three components. The first deals with the analytical framework necessary for the definition of a metafrontier function. The second component studies the properties of a metafrontier function estimated using non-parametric data envelopment analysis (DEA). The third component focuses on the estimation of a metafrontier function within the parametric framework of stochastic frontier analysis (SFA). The empirical application of the models uses crosscountry agricultural sector data. The metafrontiers that are estimated by DEA and SFA are presented and discussed.
JEL Classifications: C23, C51, C63, D24, L6

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