Abstract
Empirical production frontiers are sometimes observed to shift downward over certain periods of time, associating higher quantities of input with lower quantities of output This phenomenon is quite different than an increase in observed inefficiency relative to best-practice. We find such a shift for the Indian vacuum-pan sugar industry, and identify its cause as environmental adversity reducing the performance of best-practice technology. Specifically, agro-climatic difficulties exacerbated by regulation-induced rigidities provide the adverse environment. The case serves as a context for a re-examination of the concepts of best-practice technology and technological regress.
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