Skip to main content

The empirical identification of heterogeneous technologies and technical change

Buy Article:

$53.17 plus tax (Refund Policy)


When different technologies are present in an industry, we assume that a homogeneous technology will lead to misleading implications about technical change and inefficient policy recommendations. In this article a latent class modelling approach and flexible estimation of the production structure is used to distinguish different technologies for a representative sample of EU dairy producers, as an industry exhibiting significant structural changes and differences in production systems in the past decades. The model uses a transformation function to recognize multiple outputs; separate technological classes based on multiple characteristics, a flexible generalized linear functional form, a variety of inputs and random effects to capture firm heterogeneity; and measures of first- and second-order elasticities to represent technical change and biases. We find that if multiple production frontiers are embodied in the data, different firms exhibit different output or input intensities and changes associated with different production systems that are veiled by overall (average) measures. In particular, we find that farms that are larger and more capital intensive experience greater productivity, technical progress and labour savings, and enjoy scale economies that have increased over time.

Keywords: O12; O33; heterogeneous technologies; localized technical change; productivity; transformation function

Document Type: Research Article


Affiliations: 1: Department of Economics,University of Manchester, Manchester, UK 2: Department of Agricultural and Resource Economics,University of California, Davis,CA, USA

Publication date: April 1, 2013

More about this publication?

Access Key

Free Content
Free content
New Content
New content
Open Access Content
Open access content
Partial Open Access Content
Partial Open access content
Subscribed Content
Subscribed content
Free Trial Content
Free trial content
Cookie Policy
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more