Stochastic Frontier Estimation and Sources of Technical Efficiency in Southern Timber Harvesting

Abstract

Abstract This research provides estimates of average industry and firm-specific technical efficiency using an econometric stochastic frontier production function for individual firms operating in the southern U.S. pulpwood harvesting industry in both 1979 and 1987. The stochastic frontier production function is capable of distinguishing deviations from the frontier due to uncontrollable stochastic elements, as well as provide a pure measure of technical efficiency. Results indicate that mean industry technical efficiency was nearly constant at 60% in both periods while frontier technical change averaged 1.8% annually over the period. Elements of human capital, technology, and production scale were influential in explaining efficiency differentials among firms. However, the relative influence of these factors changed over time. For. Sci. 41(3):576-593.