Estimating farm productivity differentials using panel data: The Hausman-Taylor approach

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This paper investigates the relation between unobserved farm productivity and other production factors in a system of netput equations for specialised pig breeding farms in the Netherlands. In order to estimate the system, a Hausman-Taylor panel data estimator is developed for a system of equations with unbalanced panel data. Tests on correlation between model variables and farm-effects are performed, yielding insight in the sources of differences in total factor productivity and its components (e.g. managerial ability and scale economies). Results indicate that specialised pig breeding farms that are characterised by high total factor productivity have more buildings and machinery than farms with low total factor productivity.
Original languageEnglish
Pages (from-to)397-415
JournalJournal of Agricultural Economics
Issue number3
Publication statusPublished - 2003


  • instrumental variables estimators
  • efficient estimation
  • information
  • demand
  • growth
  • bias

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