Inefficiency in animal production: A parametric approach

Abstract

A stochastic frontier approach (SFA) was estimated for three types of farms using Frontier Software. The groups of farms were created using cluster analysis and SPSS Statistical package for the Social Sciences. The Frontier Program allowed the estimation of efficiency (model I) and inefficiency models (model II). The efficiency in Faial (Azores) island farms was higher than 82%, and the most important inefficiency variables were subsidies, equipment amortization and small dimension.