Using information about technologies, markets and firm behaviour to decompose a proper productivity index

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Subsidies and Technical Efficiency in Agriculture: Evidence from European Dairy Farms (2017, background): “where a0 and h0 are vectors of parameters to be estimated, y is observed output, x is a vector containing the inputs as well as the constant term one, v is a random term that accounts for the effects of unobserved heterogeneity across farms and stochastic events affecting the production process (as ”