TECHNICAL EFFICIENCY MEASUREMENT OF DAIRY FARMS IN POLAND: AN APPLICATION OF BAYESIAN VED MODEL

The purpose of this paper is to measure the technical efficiency of Polish dairy farms using a Bayesian Varying Efficiency Distribution (VED) model. In particular, the paper presents the design and assumptions of frontier stochastic production function for panel data. Furthermore, it specifies the microeconomic production function based on panel data, derived from the Polish FADN (Farm Accountancy Data Network). The main part of the paper presents key findings which form the basis of understanding the technological characteristics and average efficiency of Polish dairy farms. Moreover, the exogenous variables affecting the level of average farm efficiency are identified. They are the source of significant differences in levels of efficiency of dairy farmers surveyed.