Technical efficiencies calculated using aggregated inputs are biased. It is shown empirically and analytically that input aggregation decreases calculated technical efficiencies and changes relative technical efficiencies among firms. Moreover, aggregation fails to separate technical efficiency...

Changes in state milk production per cow are analyzed as a time series to determine the form and size of increase. Future milk yields are projected using parameter estimates. States are also grouped according to the correlation matrix of residuals to determine which states react similarly to...

I argue that much of what researchers have been measuring as technical inefficiency may be allocative inefficiency. When inputs are aggregated it is shown that any allocative inefficiency is manifested as technical inefficiency. Greater degrees of aggregation may produce lower measures of...