Econometric Inefficiency Estimates in a Competitive Environment

Abstract

The objective of this paper is to apply a Cobb-Douglas, Translog Stochastic Production Function and Data Envelopment Analysis -particularly the Malmquist index -in order to estimate increases or decreases of inefficiencies over time as well as the sources of TFP changes for the main Brazilian grain crops -namely, rice, beans, maize, soybeans and wheat -throughout the most recent data available comprising the period [2001][2002][2003][2004][2005][2006]. According to the Cobb Douglas model, the greatest elasticity presented is that of harvested area, followed by agricultural credit and limestone. The Translog production function presents an amelioration of aggregate productivity over time and, in a decreasing order, the Brazilian regions that have presented the greatest relative degree of efficiency are the Northeast, North, Southeast, South and Center-West regions. The results indicate that, although there have been positive changes in TFP for the sample analyzed, a decline in the use of technology has been evidenced for all the principal Brazilian grain crops between 2005/2007 -period in which we observe a remarkable downfall in the use of inputs in Brazilian agriculture.