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"stochastic frontier"
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An Analysis of Energy Use Efficiency in China by Applying Stochastic Frontier Panel Data Models
2020
This paper investigates energy use efficiency at the province level in China using the stochastic frontier panel data model approach. The stochastic frontier model is a parametric model which allows for the modeling of the relationship between energy use and its determinants using different control variables. The main control variables in this paper are energy policy and environmental and regulatory variables. This paper uses province level data from all provinces in China for the period 2010–2017. Three different models are estimated accounting for the panel nature of the data; province-specific heterogeneity and province-specific energy inefficiency effects are separated. The models differ because of their underlying assumptions, but they also complement each other. The paper also explains the degree of inefficiency in energy use by its possible determinants, including those related to the public energy policy and environmental regulations. This research supplements existing research from the perspective of energy policy and regional heterogeneity. The paper identifies potential areas for improving energy efficiency in the western and northeastern regions of China. Its findings provide new empirical evidence for estimating and evaluating China’s energy efficiency and a transition to cleaner energy sources and production.
Journal Article
Stochastic frontier models using the Generalized Exponential distribution
2021
We present a new, single-parameter distributional specification for the one-sided error components in single-tier and two-tier stochastic frontier models. The distribution has its mode away from zero, and can represent cases where the most likely outcome is non-zero inefficiency. We present the necessary formulas for estimating production, cost and two-tier stochastic frontier models in logarithmic form. We pay particular attention to the use of the conditional mode as a predictor of individual inefficiency. We use simulations to assess the performance of existing models when the data include an inefficiency term with non-zero mode, and we also contrast the conditional mode to the conditional expectation as measures of individual (in)efficiency.
Journal Article
Assessing the Inbound Tourism Efficiency of European Countries in China: 2006-2019
by
Chen, Ji
,
Wu, Lingzhi
,
Hao, Lili
in
Business Economy / Management
,
Decision making
,
Economic factors
2023
Assessing inbound tourism efficiency helps to understand the potential levels and constraints of inbound tourism flows. In this study, 35 European countries and China were selected as samples and influencing factors oftourism efficiency were constructed within the gravity model (GM) and stochastic frontier analysis (SFA). Taking into account individual heterogeneity, a true fixed-effects stochastic frontier gravity model (TFE-SFA-GM) was developed and empirically analysed using data from 2006 to 2019. The results show that (1) the inbound tourism efficiency of European countries in China is jointly affected by many core factors, such as economic scale, geographic distance, and population size on both sides; (2) the inefficiency factors that affect the inbound tourism efficiency of European countries in China are diversified;(3) the inbound tourism efficiency of European countries in China generally shows an upward trend during the sample period, but there are significant differences in the gap between the frontier level of inbound tourism flow in China and the actual inbound tourism flow. These findings imply that to better attract European tourists, China must continue to maintain and strengthen economic and trade relations with European countries, create a favourable security environment for tourism, highlight the integration of international tourism resources with Chinese culture, and continue to promote them in Europe.
Journal Article
Analyzing Factors That Affect Rice Production Efficiency and Organic Fertilizer Choices in Vietnam
2022
Rice farmers in Vietnam face many difficulties achieving technical efficiency (TE), which can be measured by the distance to the production frontier, in rice production due to non-optimal combinations of inputs and the influence of household socioeconomic characteristics. This study investigates the TE of rice production by applying stochastic frontier analysis to raw data obtained from the Vietnamese Households Living Standards Survey 2016 (VHLSS 2016) database. In addition, organic fertilizers now demand much attention worldwide because of their environmentally friendly characteristics. Therefore, this study identifies the effects of organic fertilizer choices on the TE of rice production. The results show that farmers in Vietnam achieved 87.6 percent TE and that most factors tested had significant effects on rice production. Instead of rice monoculture, the four main factors with strong and positive effects on TE levels were intensive labor, irrigation, mixing crops instead of rice monoculture, and education. Moreover, this study also revealed that organic fertilizer plays a vital role in growing rice by applying propensity score matching (PSM) between farmers who use or do not use irrigation facilities in rice production. While in the process of building a system, the government should focus on rice producers to strive for maximum efficiency with regard to labor productivity and mixed-crop farming, and to take proper measures to improve rice productivity and quality through the use of organic fertilizers. As a result, this study revealed that the use of organic fertilizers for rice production in Vietnam does not always benefit households’ TE.
Journal Article
The effect of farm size on economic efficiency: a case study of Vietnamese pangasius farms
2021
Despite an expansion of production, pangasius farmers have experienced economic challenges in Vietnam. The aim of this study was to identify optimum economic alternatives for pangasius farmers. A single-stage stochastic frontier analysis was used to estimate the economic efficiency of pangasius farms and investigate the farm size–economic efficiency relationship using cross-sectional data collected on Vietnamese pangasius farms. The study found a nonlinear relationship between farm size and economic efficiency, with economic efficiency increasing until the farm area reached a threshold of 26.9 ha, then falling due to transaction and agency costs under asymmetric information. The farming experience of the decision-makers negatively affected efficiency. Similar to previous studies, we found feed and fingerling costs were essential input factors for farms. Based on these results, we recommend three strategies for improving the economic efficiency of farms are: providing timely market information to farmers; determining the optimal farming scale depending upon the specific farmer’s available resources; and using a good quality of fingerlings and feed.
Journal Article
Inequality in Fossil Fuel Power Plants in China: A Perspective of Efficiency and Abatement Cost
by
Yongrok Choi
,
Yunning Ma
,
Hyoungsuk Lee
in
Air quality management
,
Carbon
,
China’s fossil fuel power plants
2023
Quantifying the shadow price (SP) of CO2 emissions is the key to achieving China’s “double carbon” targets. Considering technology heterogeneity, this study applies stochastic frontier analysis combined with meta-frontier technology to estimate the environmental technical efficiency (ETE) and SP of CO2 emissions for China’s fossil fuel power plants from 2005 to 2015. This approach overcomes the lack of statistical inference and consistency of traditional methods and improves the reliability of results. The main results are as follows: (a) the average ETE of China’s power plants is 0.9444, indicating that inefficient production accounts for 5.66%. The difference in efficiency between the central and local groups is significant. (b) The national average SP of CO2 is 266.8 US dollars per ton, which is much higher than the carbon price in the emission trading system. This result implies the need to design a carbon trading price mechanism. (c) The distribution of SP shows obvious corporation and geographical characteristics that are closely related to the level of regional economic development. Finally, the findings provide policy implications for the improvement of the efficiency and abatement of costs of power plants and the determination of carbon prices.
Journal Article
AN ECONOMIC ANALYSIS OF MEAT POULTRY BREEDING PROJECTS AND THEIR PROFIT EFFICIENCY IN IRAQ FOR THE YEAR 2020( WASIT AS A CASE STUDY)
by
Jbara, Osamah K.
,
Al-Hachami, I.S.A
,
AL-Bahadely, F. H. N.
in
Agricultural engineering
,
Animal husbandry
,
Breeding
2022
This research was aimed to study and analyze the costs, revenues, and profits of meat chicken breeding projects. The study also estimating the random frontier profit function, the profit inefficiency function and profit efficiency which based on cross-sectional data that included 59 projects for raising meat poultry in Waist governorate in 2020.The results of the analysis showed through the descriptive analysis of the cost structure that, the costs of chicks and fodder account for more than 70% of the costs, as well as achieving economic profits for projects. Through the random border profit function, the significance of both the total revenue and the costs of chicks, fodder, medicines, vaccines, and services (water, electricity and fuel) was shown. As for the inefficiency function parameters, they were significant for each proved the age of the breeder, his years of experience, the presence of the veterinarian and the agricultural engineer. As for the efficiency of profits, it was 76%. The researcher recommended the necessity of supporting breeding projects by providing incentives to feed factories and their processors or supporting feeds and private hatcheries to reduce costs and provide training for less experienced breeders and urge them to involve veterinarians and agricultural engineers in supervising broiler projects.
Journal Article
Effects of Mechanization and Investments on the Technical Efficiency of Cassava Farms in Cambodia
by
Hisako Nomura
,
Kasumi Ito
,
Pao Srean
in
Agricultural economics
,
Agricultural equipment
,
Agricultural production
2022
Cassava is one of the most important cash crops in Cambodia. Agricultural mechanization promotes productivity, but overinvestment may disrupt the balance between inputs and outputs. Depending on the production scale, sometimes hiring equipment is considered better than purchasing it. While we can hypothesize that mechanization and investments might be crucial factors of productivity, technical efficiency analysis for estimating their effects has not yet been conducted. Therefore, this study investigates the impact of mechanization and investments on cassava yield and producers’ technical efficiency in Cambodia using the Cobb-Douglas stochastic frontier production model. For the study, 205 respondents were randomly selected and interviewed in the Battambang and Pailin provinces in northwestern Cambodia in 2017. Our results show that tractor or truck-hire cost was positively significant, and the cassava uprooting machine-hire cost was negatively significant. The average technical efficiency score of 0.62 indicates that cassava producers can increase their level of technical efficiency. Although cassava production in Cambodia is mechanized and investors are investing, it would be more beneficial to producers if they were provided with financial assistance when uprooting the cassava at the harvest time. Appropriate control of input costs can effectively improve cassava yield, following the implementation of the National Policy on Cassava 2020–2025 by the Royal Government of Cambodia.
Journal Article
Comparative Study of Three Commonly Used Methods for Hospital Efficiency Analysis in Beijing Tertiary Public Hospitals, China
2015
Background: Tertiary hospitals serve as the medical service center within the region and play an important role in the medical and health service system. They are also the key targets of public hospital reform in the new era in China. Through the reform of health system, the public hospital efficiency has changed remarkably. Therefore, this study aimed to provide some advice for efficiency assessment of public hospitals in China by comparing and analyzing the consistency of results obtained by three commonly used methods for examining hospital efficiency, that is, ratio analysis (RA), stochastic frontier analysis (SFA), and data envelopment analysis (DEA). Methods: The theoretical basis, operational processes, and the application status of RA, SFA, and DEA were learned through literature analysis. Then, the empirical analysis was conducted based on measured data from 51 tertiary public hospitals in Beijing from 2009 to 2011. Results: The average values of hospital efficiency calculated by SFA with index screening and principal component analysis (PCA) results and those calculated by DEA with index screening results were relatively stable. The efficiency of specialized hospitals was higher than that of general hospitals and that of traditional Chinese medicine hospitals. The results obtained by SFA with index screening results and the results obtained by S FA with PCA results showed a relatively high correlation (r-value in 2009, 2010, and 2011 were 0.869, 0.753, and 0.842, respectively, P 〈 0.01). The correlation between results obtained by DEA with index screening results and PCA results and results obtained by other methods showed statistical significance, but the correlation between results obtained by DEA with index screening results and PCA results was lower than that between results obtained by SFA with index screening results and PCA results. Conclusions: RA is not suitable for multi-index evaluation of hospital efficiency. In the given conditions, SFA is a stable efficiency analysis method. In the evaluation of hospital efficiency, DEA combined with PCA should be adopted with caution due to its poor stability.
Journal Article
MEASURING THE TECHNICAL EFFICIENCY OF POTATO PRDUCTION AND ITS DETERMINATS IN IRAQ (BAGHDAD PROVINCE AS CASE STUDY)
2020
This study aimed to estimate the stochastic frontier production function and the inefficiency function and technical efficiency of potato production by using cross-section data collected from 173 potato farms that were randomly selected in Baghdad province/ Yusifiyah for production season 2016. The results showed that 90.6% of inefficiency in production was due to technical inefficiency. Also, there was a significant relationship between the variables of inefficiency function and the inefficiency of farms. The values of the parameters of the stochastic frontier production function were positive and significant for both human work hours and the amount of seeds. However, the parameter of DAP fertilizer was negative and significant. The estimation of the technical inefficiency function showed that its parameters were significant for both the local seed provider and the agricultural season (fall), while the parameters experience in growing potatoes and the number of irrigations were significant and their impact was negative on the inefficiency. The results also showed that the technical efficiency of the study sample (50%) on average. The researchers recommended the necessity of providing imported seed tubers for the increased productivity in dunum to achieve technical efficiency.
Journal Article