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This paper deals with the estimation of technical efficiency using pseudo panel data constructed from rotating panel data on Swedish crop farmers where each unit is observed for a maximum of four years. Farms are grouped into 89 cohorts, using their common time‐invariant characteristics, and the cohorts are used as an individual unit in the empirical analysis. The overall technical inefficiency is decomposed into a persistent and a residual component. An alternative model with time‐varying technical inefficiency is also considered. In addition to technical inefficiency, measures of returns to scale and technical change are also obtained.
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Heshmati et al. (1997) studied this question.
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