Generalised maximum entropy estimation and heterogeneous technologies

Generalised maximum entropy methods are used to estimate a dual model of production on panel data of Dutch cash crop farms over the period 1970-1992. The generalised maximum entropy approach allows a coherent system of input demand and output supply equations to be estimated for each farm in the sample, thus capturing technological heterogeneity. The estimation results are used to perform a cluster analysis to identify groups of farms with similar technologies.