Econometric Estimation of Technical and Environmental Efficiency: An Application to Dutch Dairy Farms

1999/02/01 by Stijn Reinhard, C.A. Knox Lovell, C. A. Knox Lovell +2 · 16 citations
Decision Sciences · Economics, Econometrics and Finance · Environmental Science · #Efficiency Analysis Using DEA #Economic and Environmental Valuation #Sustainable Agricultural Systems Analysis

paper · doi:10.2307/1244449

Abstract

Abstract In this article we estimate the technical and environmental efficiency of a panel of Dutch dairy farms. Nitrogen surplus, arising from the application of excessive amounts of manure and chemical fertilizer, is treated as an environmentally detrimental input. A stochastic translog production frontier is specified to estimate the output‐oriented technical efficiency. Environmental efficiency is estimated as the input‐oriented technical efficiency of a single input, the nitrogen surplus of each farm. The mean output‐oriented technical efficiency is rather high, 0.894, but the mean input‐oriented environmental efficiency is only 0.441. Intensive dairy farms are both technically and environmentally more efficient than extensive farms.

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