Efficiency of Scottish farms: a stochastic cost frontier analysis

In this paper the relative cost efficiency of Scottish farms is determined, and variables that explain this efficiency by farm type are identified and implications discussed. A panel dataset from the Farm Accounts Scheme (FAS) survey for the period 1997-2004 was used for the estimation. A cost efficiency indicator was measured using a fixed ef-fect panel data regression. Further analysis, to explain the efficiency results, indicated the presence of important farm size and regional effects. However, other variables, whilst statistically significant, did not produce a consistent effect across the different farm types