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- M2513 - TONTS PRINT.indd 142 M2513 - TONTS PRINT.indd 142 27/01/2011 13:11 27/01/2011 13:11 Matthew Tonts and M. A.B. Siddique - 9781847208187 Downloaded from Elgar Online at 10/06/2016 07:05:00PM via CitEc (NOT FOR DISTRIBUTION, SHARING or POSTING) Global integration and agricultural productivity in China 143 APPENDIX 7.1 Symbolically, assume that the production technology in logarithmic form can be modelled as follows: ln yit 5 ai 1 ln f(xit; b) 1 uit (7A.1) where yit and xit represent outputs and inputs, a is the individual effect, b is a vector of parameters to be estimated and uit is the white noise. Given equation (7A.1), technical efficiency (TE) which is defined as the ratio of the observed output over the best practice output, can be derived using the following procedure: TEit 5 ee ^it2e ^t (7A.2) where e ^it 5 a ^ i 1 ûit and e ^t 5 max(ûit).
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