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The Strathprints institutional repository is a digital archive of University of Strathclyde research outputs. Strathprints provides access to thousands of Open Access research papers by University of Strathclyde researchers, including those from the School of Psychological Sciences & Health - but also papers by researchers based within the Faculties of Science, Engineering, Humanities & Social Sciences, and from the Strathclyde Business School.

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Multiple output production with undesirable outputs: an application to nitrogen surplus in agriculture

Fernandez, C. and Koop, G.M. and Steel, M. (2002) Multiple output production with undesirable outputs: an application to nitrogen surplus in agriculture. Journal of the American Statistical Association, 97. pp. 432-442. ISSN 0162-1459

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Abstract

Many production processes yield both good outputs and undesirable ones (e.g., pollutants). In this article we develop a generalization of a stochastic frontier model that is appropriate for such technologies. We discuss efficiency analysis and, in particular, define technical and environmental efficiency in the context of our model. We develop methods for carrying out Bayesian inference and apply them to a panel data set of Dutch dairy farms, where excess nitrogen production constitutes an important environmental problem.