Stochastic frontier model approach for measuring stock market efficiency with different distributions

The stock market is considered essential for economic growth and expected to contribute to improved productivity. An efficient pricing mechanism of the stock market can be a driving force for channeling savings into profitable investments and thus facilitating optimal allocation of capital. This study investigated the technical efficiency of selected groups of companies of Bangladesh Stock Market that is the Dhaka Stock Exchange (DSE) market, using the stochastic frontier production function approach. For this, the authors considered the Cobb-Douglas Stochastic frontier in which the technical inefficiency effects are defined by a model with two distributional assumptions. Truncated normal and half-normal distributions were used in the model and both time-variant and time-invariant inefficiency effects were estimated. The results reveal that technical efficiency decreased gradually over the reference period and that truncated normal distribution is preferable to half-normal distribution for technical inefficiency effects. The value of technical efficiency was high for the investment group and low for the bank group, as compared with other groups in the DSE market for both distributions in time-varying environment whereas it was high for the investment group but low for the ceramic group as compared with other groups in the DSE market for both distributions in time-invariant situation.     

The technical efficiency of transhumance sheep and goat farms and the effect of EU subsidies: Do small farms benefit more than large farms?

Transhumance sheep and goat production have been a common and traditional practice in Greece, with its origins dating back to ancient times. Despite the diminishing number of transhumance farms, it remains an essential activity in less-favoured and mountainous areas of the country. This article applies DEA (Data Envelopment Analysis) in a sample of transhumance farms in Greece in order to assess the technical efficiency of sheep and goat transhumance flocks and determine the factors that affect their performance. The effect of EU subsidies on the technical efficiency of transhumance farms is assessed and the type of farms that benefit most is investigated. Results accrued reveal that the overall technical efficiency of transhumance farms in Greece is quite low and it is affected by herd size. EU subsidies have a significant impact on the technical efficiency of only the low-efficiency, small-sized farms.     

Economics of technical efficiency in white honey production: Using stochastic frontier production function

This study estimates and compares technical efficiency levels among beekeeping projects with various production capacities using a sample drawn from Fayoum Governorate in Egypt. The study also compares among beekeeping’s most important economic indicators, estimates the optimum production amount, and investigates why technical efficiency in Egyptian beekeeping is declining. We conclude that the average cost to produce one ton of honey decreases when production capacity increases. Furthermore, the average total, net return, and return on investment of one Egyptian pound increases when production capacity increases. Moreover, the results of a stochastic frontier production function indicate an increased return to scale. Finally, the results of maximum likelihood estimation show that technical inefficiency helps explain the deviation of actual from optimal production amounts.     

中国生物科技企业前沿模型的构建与应用研究

综述了前沿模型的产生、发展、分类,并在此基础上根据2004年度中国主要生物科技上市公司样本数据,尝试构建中国生物科技企业前沿模型。分别选用了随机前沿模型、确定性参数前沿模型和确定性统计前沿模型并根据主要统计检验指标进行分析比较,结果发现:2004年度中国主要生物科技企业上市公司样本数据适合于建立确定性统计前沿模型。根据建立的确定性统计前沿模型测定中国主要生物科技企业上市公司技术效果发现:中国主要生科企业普遍存在着技术效率低下、差距大的现状;资本投入对产出的影响大大高于劳动力投入对产出的影响;中国东、中、西部主要生科企业总平均技术效率并无显著差异。     

Technical efficiency of small-scale fishing households in Tanzanian coastal villages: an empirical analysis

The effort to conserve fisheries resources and improve the welfare of small-scale fishing households is an important objective of poverty reduction strategies in Tanzania. The success of such strategies depends on both the diversity and the level of efficiency within small-scale fishing households. This paper examines the technical efficiency of Tanzanian small-scale fishing households, based on data from two coastal villages located near Bagamoyo and Zanzibar, using a stochastic frontier model with technical inefficiency. The estimated mean technical efficiency of small-scale fishing households was 52%, showing that they were operating far below optimum efficiency. The efficiency of individual fishing households was positively associated with fishing experience, size of farming land, distance to the fishing ground and potential market integration; it was negatively related to non-farm employment and bigger household sizes. Future policies aimed at conservation and development in fishing communities should provide mechanisms that improve the access of small-scale fishing households to less-destructive fishing tools (via the provision of credit facilities) and to markets, as well as the creation of new employment opportunities in other sectors. In addition, measures which check the use of illegal fishing gear, overcapitalisation and open-access problems should be considered.     

A Method for Measuring the Efficiency Gap between Average and Best Practice Energy Use: The ENERGY STAR Industrial Energy Performance Indicator

A common feature distinguishing between parametric/statistical models and engineering economics models is that engineering models explicitly represent best practice technologies, whereas parametric/statistical models are typically based on average practice. Measures of energy intensity based on average practice are of little use in corporate management of energy use or for public policy goal setting. In the context of companyor plant‐level indicators, it is more useful to have a measure of energy intensity that is capable of indicating where a company or plant lies within a distribution of performance. In other words, is the performance close to (or far from) the industry best practice? This article presents a parametric/statistical approach that can be used to measure best practice, thereby providing a measure of the difference, or “efficiency gap,” at a plant, company, or overall industry level. The approach requires plant‐level data and applies a stochastic frontier regression analysis used by the ENERGY STAR^TM industrial energy performance indicator (EPI) to energy intensity. Stochastic frontier regression analysis separates energy intensity into three components: systematic effects, inefficiency, and statistical (random) error. The article outlines the method and gives examples of EPI analysis conducted for two industries, breweries and motor vehicle assembly. In the EPI developed with the stochastic frontier regression for the auto industry, the industry median “efficiency gap” was around 27%.     

Profitability of a dairy sheep genetic improvement program using artificial insemination

This simulation study investigated the farm-level economic benefits of a genetic improvement scheme using artificial insemination (AI) with fresh ram semen in dairy sheep of the Chios breed in Greece. Data were collected from 67 farms associated with the Chios Sheep Breeders' Cooperative 'Macedonia', describing the percentage of ewes that would be artificially inseminated in the flock, pregnancy rate, annual ram costs that could be saved using AI rather than natural mating, expected improvement in milk production, annual costs of semen and feed, milk price and number of years of AI usage. The study considered 77 760 possible scenarios in a 3 × 4 × 4 × 3 × 3 × 3 × 4 × 15 factorial arrangement. Analysis of variance was used to investigate the effect of each factor on farm profitability. All factors considered were statistically significant (P < 0.001), but their effect varied. The number of years using AI had the greatest effect on profitability and farmers should become aware that using AI is a long-term investment. Semen price, pregnancy rate and improvement in milk production also had substantial effects. The price of milk and feed had a considerably lower effect on profitability, as did the annual cost of maintaining rams that would be replaced by AI. A positive annual and cumulative return was achieved in the model within the first 6 years. The cost of semen was estimated at 8€ to 10€ per dose for the first 5 years. Where the annual improvement in milk production was 1% of annual phenotypic mean (e.g. 3.0 kg) profitability of the scheme was improved greatly.     

Does directed technological change get greener: Empirical evidence from Shanghai's industrial green development transformation

The degree of technological change biased to the environmental factor is crucial to industrial sustainable development. Using the stochastic frontier analysis method based on the translog production function and the panel data of 32 industrial sub-sectors in Shanghai over 1994–2011, this paper combines the evolution dynamic of the frontier technological structure with the evolution dynamic of technological change direction to estimate the output elasticities of production factors and the growth rate of green total factor productivity. Also, we investigate and compare the degrees of technological change biased to four production factors, i.e., capital, labor, energy, and carbon emissions. The results show that the industrial green total factor productivity in Shanghai presents an overall upward trend and mainly depends on the technical efficiency change. The improvements of labor productivity, R&D intensity, and energy efficiency can effectively enhance the green technical efficiency, while capital deepening has a mitigation effect on the green technical efficiency. The technological change of Shanghai's industrial production biases to energy use and capital saving, causing a high energy demand of industrial development. Under the dual impacts of economic development and energy-saving and emission-reduction policies, the degree of technological change biased to the environmental factor (carbon emissions) displays strong and weak alternations, indicating that the green bias of industrial technological change in Shanghai is not stable and that the green transformation of industrial development model needs to be further advanced.     

Sources of technical efficiency of sheep production systems in dry areas in Syria

A random sample of sheep producers in the dry areas of Syria were surveyed in 2002. Based on sheep movement, four production systems were identified; migratory, transhumance, semi-sedentary and sedentary. The survey data was analyzed using a single-stage model for estimating the technical inefficiencies of each production and its determinants. Technical efficiency ranges from 0.67 to 0.97, with considerable variation within each of the four production systems. The sedentary production system was the most efficient, and the migratory system the least efficient. The major factors causing inefficiencies included high abortion rate, low fertility, high lamb mortality, and long distances to markets and water sources. Improving the physiological conditions of the sheep and selecting the appropriate system of sheep production according to the location of the farm would improve efficiency of the sheep production substantially. Efficiency of sheep production in Syria can be improved by encouraging producers to shift to more intensive systems. As production and market conditions are fairly stable in Syria, the results and their implications are still valid.     

Graph-based impact analysis as a framework for incorporating practitioner knowledge in dairy herd health management

Production diseases in dairy cows are multifactorial, which means they emerge from complex interactions between many different farm variables. Variables with a large impact on production diseases can be identified for groups of farms using statistical models, but these methods cannot be used to identify highly influential variables in individual farms. This, however, is necessary for herd health planning, because farm conditions and associated health problems vary largely between farms. The aim of this study was to rank variables according to their anticipated effect on production diseases on the farm level by applying a graph-based impact analysis on 192 European organic dairy farms. Direct impacts between 13 pre-defined variables were estimated for each farm during a round-table discussion attended by practitioners, that is farmer, veterinarian and herd advisor. Indirect impacts were elaborated through graph analysis taking into account impact strengths. Across farms, factors supposedly exerting the most influence on production diseases were ‘feeding’, ‘hygiene’ and ‘treatment’ (direct impacts), as well as ‘knowledge and skills’ and ‘herd health monitoring’ (indirect impacts). Factors strongly influenced by production diseases were ‘milk performance’, ‘financial resources’ and ‘labour capacity’ (directly and indirectly). Ranking of variables on the farm level revealed considerable differences between farms in terms of their most influential and most influenced farm factors. Consequently, very different strategies may be required to reduce production diseases in these farms. The method is based on perceptions and estimations and thus prone to errors. From our point of view, however, this weakness is clearly outweighed by the ability to assess and to analyse farm-specific relationships and thus to complement general knowledge with contextual knowledge. Therefore, we conclude that graph-based impact analysis represents a promising decision support tool for herd health planning. The next steps include testing the method using more specific and problem-oriented variables as well as evaluating its effectiveness.     

Financial evaluation of different vaccination strategies for controlling the bluetongue virus serotype 8 epidemic in The Netherlands in 2008

Background

Bluetongue (BT) is a vector-borne disease of ruminants caused by bluetongue virus that is transmitted by biting midges (Culicoides spp.). In 2006, the introduction of BTV serotype 8 (BTV-8) caused a severe epidemic in Western and Central Europe. The principal effective veterinary measure in response to BT was believed to be vaccination accompanied by other measures such as movement restrictions and surveillance. As the number of vaccine doses available at the start of the vaccination campaign was rather uncertain, the Dutch Ministry of Agriculture, Nature and Food Quality and the Dutch agricultural industry wanted to evaluate several different vaccination strategies. This study aimed to rank eight vaccination strategies based on their efficiency (i.e. net costs in relation to prevented losses or benefits) for controlling the bluetongue virus serotype 8 epidemic in 2008.

Methodology/Principal Findings

An economic model was developed that included the Dutch professional cattle, sheep and goat sectors together with the hobby farms. Strategies were evaluated based on the least cost - highest benefit frontier, the benefit-cost ratio and the total net returns. Strategy F, where all adult sheep at professional farms in the Netherlands would be vaccinated was very efficient at lowest costs, whereas strategy D, where additional to all adult sheep at professional farms also all adult cattle in the four Northern provinces would be vaccinated, was also very efficient but at a little higher costs. Strategy C, where all adult sheep and cattle at professional farms in the whole of the Netherlands would be vaccinated was also efficient but again at higher costs.

Conclusions/Significance

This study demonstrates that a financial analysis differentiates between vaccination strategies and indicates important decision rules based on efficiency.     

Involvement of small-scale dairy farms in an industrial supply chain: when production standards meet farm diversity

In certain contexts, dairy firms are supplied by small-scale family farms. Firms provide a set of technical and economic recommendations meant to help farmers meet their requirements in terms of the quantity and quality of milk collected. This study analyzes how such recommendations may be adopted by studying six farms in Brazil. All farms are beneficiaries of the country's agrarian reforms, but they differ in terms of how they developed their activities, their resources and their milk collection objectives. First, we built a technical and economic benchmark farm based on recommendations from a dairy firm and farmer advisory institutions. Our analysis of the farms' practices and technical and economic results show that none of the farms in the sample apply all of the benchmark recommendations; however, all farms specialized in dairy production observe the main underlying principles with regard to feeding systems and breeding. The decisive factors in whether the benchmark is adopted and successfully implemented are (i) access to the supply chain when a farmer establishes his activity, (ii) a grasp of reproduction and forage production techniques and (iii) an understanding of dairy cattle feed dietary rationing principles. The technical problems observed in some cases impact the farms' dairy performance and cash position; this can lead to a process of disinvestment. This dynamic of farms facing production standards suggests that the diversity of specialized livestock farmers should be taken into account more effectively through advisory approaches that combine basic zootechnical training with assistance in planning farm activities over the short and medium term.     

The relation between input-output transformation and gastrointestinal nematode infections on dairy farms

Efficiency analysis is used for assessing links between technical efficiency (TE) of livestock farms and animal diseases. However, previous studies often do not make the link with the allocation of inputs and mainly present average effects that ignore the often huge differences among farms. In this paper, we studied the relationship between exposure to gastrointestinal (GI) nematode infections, the TE and the input allocation on dairy farms. Although the traditional cost allocative efficiency (CAE) indicator adequately measures how a given input allocation differs from the cost-minimising input allocation, they do not represent the unique input allocation of farms. Similar CAE scores may be obtained for farms with different input allocations. Therefore, we propose an adjusted allocative efficiency index (AAEI) to measure the unique input allocation of farms. Combining this AAEI with the TE score allows determining the unique input-output position of each farm. The method is illustrated by estimating efficiency scores using data envelopment analysis (DEA) on a sample of 152 dairy farms in Flanders for which both accountancy and parasitic monitoring data were available. Three groups of farms with a different input-output position can be distinguished based on cluster analysis: (1) technically inefficient farms, with a relatively low use of concentrates per 100 l milk and a high exposure to infection, (2) farms with an intermediate TE, relatively high use of concentrates per 100 l milk and a low exposure to infection, (3) farms with the highest TE, relatively low roughage use per 100 l milk and a relatively high exposure to infection. Correlation analysis indicates for each group how the level of exposure to GI nematodes is associated or not with improved economic performance. The results suggest that improving both the economic performance and exposure to infection seems only of interest for highly TE farms. The findings indicate that current farm recommendations regarding GI nematode infections could be improved by also accounting for the allocation of inputs on the farm.     

华北平原种养一体规模化农场氮素流动特征及利用效率——以河北津龙循环农业园区为例

种养一体规模化、集约化是华北平原农业发展的必然趋势,而氮素是连接种植养殖的主要养分资源,以河北津龙循环农业园区为例,采用文献资料、实地调查方法分析农场水平氮素流动特征及利用率,并通过情景分析方法提出农场氮素管理措施,为实现农场水平氮养分资源高效利用、提高农场生产系统生产力和改善华北平原循环农业模式提供技术支撑和科学依据.结果表明: 在农场水平下,化肥和有机肥输入氮量674.6 kg·hm^-2·a^-1,占总输入氮量的88.3%,氮利用率为41.5%,种植系统氮盈余量190.7 kg·hm^-2·a^-1,施氮量过多是造成种植系统氮利用率低和氮素盈余量高的主要原因.养殖系统中外购饲料提供氮量占饲料总输入氮量的83.2%,粪尿排氮量为776.6 t·a^-1,而还田比例仅为36.3%,氮利用率19.7%.农场水平氮总利用率为40.7%.情景分析表明,农田减少化肥施氮量50%(情景1)、增加来自农场内部玉米籽粒产量(情景2)措施,可分别使种植系统氮利用率提高34.6%和15.6%,同时农场水平氮总利用率分别提高18.7%和9.8%;另外,优化养殖系统饲料结构(情景3),可使氮总利用率提高19.1%.因此,减少化肥氮施用量、调整作物种植结构、优化饲料结构等,是提高农场氮生产力和实现环境友好双赢效果的措施和途径.     

农业化学投入强度替代效率及其影响因素

采用SE-DEA和空间基尼系数,研究了2000—2016年我国农业化学投入强度替代效率,并运用Tobit模型分析了我国及各地区替代效率的驱动因素.结果表明: 我国农业化学投入强度替代的综合效率和规模效率呈现出“N”字型趋势,纯技术效率则波动上升,替代效率的地区差异明显,东部地区更倚重替代要素的投入规模;各年份全国省域差异最高的是综合效率,其次为纯技术效率,规模效率的区域差异性最小,地区内部省域差异逐渐减小,东部地区省域差异最大;农业化学投入替代效率受农业技术水平、农户收入水平、农业生产结构、农业发展程度和工业化水平的显著影响,各地区受各因素影响差异明显.推动农业化学投入替代效率,要从提高农业化学投入强度替代要素的投入效率、调整农用工业发展结构、关注农民收入水平和修订农业化学投入强度替代的补贴政策等方面入手.     

Estimating emission coefficients and mass balances using economic data: A stochastic frontier approach

In this article, we propose a stochastic formulation of mass balances that impose physical constraints on production technologies. The estimation of the model involves a composed error term structure that is commonly applied in the literature on stochastic frontier analysis of productive efficiency. Moreover, we discuss how ordinary least squares and maximum likelihood methods can be used to estimate emission coefficients based on the proposed model and compare the results to estimates based on linear programming techniques from input–output analysis. In contrast to previous approaches, our model allows one to estimate the physical limitations to production possibilities in the presence of statistical noise and depends on substantially weaker data requirements. We apply our approach to estimate emission coefficients for sulfur dioxide and carbon dioxide using a sample of fossil‐fueled power plants in the United States.     

Production,economic viability and risks associated with switching dairy cows from drylots to compost bedded pack systems

The use of compost bedded pack systems (CBS) has increased over the past 5 years in tropical countries, and studies associating production traits with economical outcomes of this system are warranted. Our objectives were to evaluate productive traits, economic outcomes and the risks of losses of dairy farms that switched from a drylot system (DLS) to a CBS and to compare these with similar farms that did not change their system. We collected data from 18 farms over 36 consecutive months (August 2014 to July 2017). All farms started the study as DLS, and six farms switched to CBS in the second year. The other 12 farms kept their DLS during the 36 months of evaluation. Annual technical and economic indexes per farm were collected and calculated. Additionally, a risk analysis was performed based on a 10-year historical series of milk prices. The results were analysed using a regression model including year and herd as categorical variables (fixed), system and herd size as quantitative variables (fixed), and system × herd as a random variable. Furthermore, a non-metric multidimensional scaling plot was used to evaluate producers’ profiles in each year. Milk fat, milk total solids, and somatic cell count did not change when farms switched from DLS to CBS, and averaged 3.80%, 12.04%, and 256 500 cells/ml, respectively. However, milk protein (%) decreased in CBS farms. The majority of milk production variables were not affected. Nevertheless, farms that switched to CBS increased milk production per cow by 13.3% compared with DLS farms. Total operation costs (296 076.83 $/year) were not affected by the system, and neither were the costs of concentrates, roughage, labour or medicines. Net margin per litre (0.09 $/l), operating profit (14.95%), assets per litre (398.68 $/l per day) and return on assets (10.27%) did not change when farms switched from DLS to CBS. Net margin ($/l and $/cow) and asset turnover rate increased in CBS farms. Risk analysis indicated that the risk was reduced by 38% in CBS farms. Furthermore, our analysis showed that producers who switched to CBS had similar technical and economic indexes in the first year before switching their system. In conclusion, this study demonstrates that CBS systems might be promising for producers in tropical countries who are looking for a more productive and less risky system. We did not observe improvements in animal health as previously reported in the literature.     

Characterization of the PRNP gene locus in Chios dairy sheep and its association with milk production and reproduction traits

The objective of this study was to examine the prion protein gene locus (PRNP) in Chios sheep. PRNP is linked with scrapie resistance in small ruminants. Here, its impact on milk production (test-day and total lactation yield) and reproduction (age at first lambing, conception rate at first service, and prolificacy) was assessed. Genotyping at codons 136, 154 and 171 (classical scrapie) and 141 (atypical scrapie) was performed using DNA from milk somatic cells and PCR-RFLP analysis. A total of 1013 Chios ewes raised in 23 flocks were used. This constituted a random sample of the national breeding population. A total of 15 genotypes and 6 alleles linked to codons 136, 154 and 171 were detected. All animals were homozygous for the leucine allele at codon 141. Linear mixed models were used to assess the impact of PRNP genotypes and alleles on milk production and reproduction traits. The TRQ allele, whose association with such traits was assessed for the first time, had an adverse effect on age at first lambing. All other PRNP alleles, including ARR, which is associated with increased resistance to classical scrapie, had no significant effect on the traits studied. No significant associations of the PRNP genotypes with production and reproduction traits were observed. It was concluded that selection for scrapie-resistant sheep is not expected to affect the ongoing breeding programme that aims to enhance the milk yield and reproduction of the Chios breed.     

Defining the breeding goal for a sheep breed including production and functional traits using market data

In this study, the economic values for production and functional traits of dairy sheep are estimated through the application of a profit function model using farm-level technical and economic data. The traits incorporated in the model were milk production, prolificacy, fertility, milking speed, longevity and mastitis occurrence. The economic values for these traits were derived as the approximate partial derivative of the specified profit function. A sensitivity analysis was also conducted in order to examine how potential changes in input and output prices would affect the breeding goal. The estimated economic values of the traits revealed their economic impact on the definition of the breeding goal for the specified production system. Milk production and fertility had the highest economic values (€40.30 and €20.28 per standard genetic deviation (SDa)), while, mastitis only had a low negative value of −0.57 €/SDa. Therefore, breeding for clinical mastitis will have a minor impact on farm profitability because it affects a small proportion of the flock and has low additive variance. The production traits, which include milk production, prolificacy and milking speed, contributed most to the breeding goal (70.0%), but functional traits still had a considerable share (30.0%). The results of this study highlight the importance of the knowledge of economic values of traits in the design of a breeding program. It is also suggested that the production and functional traits under consideration can be categorized as those which can be efficiently treated through genetic improvement (e.g. milk production and fertility) while others would be better dealt with through managerial interventions (e.g. mastitis occurrence). Also, sub-clinical mastitis that affects a higher proportion of flocks could have a higher contribution to breeding goals.