Working Paper Series
Finn R. Førsund and Lennart Hjalmarsson
Generalized Farrell Measures of Efficiency: An Application to Milk Processing in Swedish Dairy Plants
Abstract: This paper is concerned with the measurement of productive
efficiency. Farrell's measures of efficiency are generalized to
nonhomogeneous production functions. Several new measures of efficiency
have been introduced and applied to the Swedish milk processing industry.
The empirical analysis is based on a complete set of cross section- time
series data for a period of la years of 28 individual plants producing a
homogeneous product, pasteurized milk. Industrial structure and structural
change are examined by both studying the shape of the efficiency
distributions for the individual units and their changes through time. The
aggregate performance of the sector is studied by the development of the
different measures of structural efficiency.
Keywords: Agriculture; Technical progress; Production function; (follow links to similar papers)
JEL-Codes: O13; Q16; (follow links to similar papers)
28 pages, May 1978
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