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dc.contributor.authorLambarraa, Fátima
dc.contributor.authorStefanou, Spiro
dc.contributor.authorGil Roig, José María
dc.contributor.otherUniversitat Politècnica de Catalunya. Departament d'Enginyeria Agroalimentària i Biotecnologia
dc.identifier.citationLambarraa, F., Stefanou, S., Gil, J. The analysis of irreversibility, uncertainty and dynamic technical inefficiency on the investment decision in the Spanish olive sector. "European review of agricultural economics", 31 Març 2016, vol. 43, núm. 1, p. 59-77.
dc.description.abstractThis study addresses irreversible investment decision-making in the context of uncertainty when allowing for inefficiency to be transmitted over time. Both irreversibility and persistence in technical inefficiency can lead to sluggish adjustment of quasifixed factors of production. The context of our application is the Spanish olive sector using farm-level data. We first estimate a dynamic stochastic frontier model to determine the long-run technical efficiency and its persistence. Then we address the decision to invest under uncertainty and irreversibility using a real option approach and include the technical inefficiency and its persistence in the simulation model to evaluate their impact in the investment decision. Technical efficiency in the dynamic model is 72.7 per cent, which is 5.5 per cent lower than the static framework suggests. We find that olive grove investment is irreversible. However, the level of persistence in technical inefficiency is fairly low, suggesting that efforts to mitigate price uncertainty can improve production returns to the Spanish olive sector.
dc.format.extent19 p.
dc.subjectÀrees temàtiques de la UPC::Enginyeria agroalimentària::Indústries agroalimentàries::Olis i greixos comestibles
dc.subject.lcshOlive oil
dc.subject.otherSpanish olive sector
dc.subject.otherdynamic efficiency
dc.subject.otherreal option
dc.titleThe analysis of irreversibility, uncertainty and dynamic technical inefficiency on the investment decision in the Spanish olive sector
dc.subject.lemacOli d'oliva -- Aspectes econòmics
dc.contributor.groupUniversitat Politècnica de Catalunya. CREDA - Centre de Recerca en Economia i Desenvolupament Agroalimentari
dc.rights.accessOpen Access
dc.description.versionPostprint (published version)
local.citation.authorLambarraa, F.; Stefanou, S.; Gil, J.M.
local.citation.publicationNameEuropean review of agricultural economics

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