Efficiency of the Swedish pork industry: A farm level study using rotating panel data 1976-1988

This paper investigates the issues of technical efficiency, technical changes and bias in technical change in the Swedish pork industry using rotating panel data. We use a generalized Cobb-Douglas model, where the coefficients are linear functions of time. This allows input elasticities to vary over time. Technical changes and bias in technical change are farm- and time-specific. The model distinguishes farm heterogeneity from technical inefficiency. We use a corrected least squares procedure to estimate the model. The data consists of a rotating panel of 450 pork producing farms with a total number of 1506 observations during the period of 1976-1988. We compare the productive performance of farms by size of farm land and animal stock, and over time. The empirical results show among other things that technical change is found to be positive but rapidly declining during the period 1976-1980 turning into technical regress during the remaining period, 1981 to 1988. The mean technical efficiency is found to be around 91%.