New method accurately tracks technical inefficiency in dairy production over time.
The article presents a new method to separate technical change from time-varying technical inefficiency in a way that doesn't rely on specific assumptions. By using a general index and a quadratic function of time trend, the researchers were able to identify parameters related to technical change and inefficiency separately. They applied this method to the UK dairy sector from 1982 to 1992 and found estimates of technical inefficiency and technical change using a translog production frontier function.