What is it about?

Analyses of farm efficiency can deliver significant insight into the competitiveness of farms and their potential to increase productivity and improve resource use. Policymakers are particularly interested in the potential impact of their decisions on the performance of firms. We present a new method to investigate the farm efficiency using Hungarian farm level data .

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Why is it important?

Good agricultural policymaking requires the accurate knowledge of the production technology and efficiency of farms. However, several methodological issues should be considered when modelling production and estimating technical efficiency.The paper offers solution for two of these methodological issues, Our findings show that technological heterogeneity has a greater effect on variation in output than efficiency. These findings also reveal that the importance of regional natural and economic conditions is significant but not sufficient to understand the differences in farm efficeincy.


More work is necessary to distinguish the various sources of heterogeneity. While our analysis showed that heterogeneity has an important impact on variation in output, identification of the sources of heterogeneity might help to improve the productivity of farms.

Professor Imre Ferto
Centre for Economic and Regional Studies, Hungarian Academy of Sciences: Budapest

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This page is a summary of: Technological Differences, Theoretical Consistency, and Technical Efficiency: The Case of Hungarian Crop-Producing Farms, Sustainability, February 2020, MDPI AG, DOI: 10.3390/su12031147.
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