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Efficiency Measurement in Greek Dairy Farms: Stochastic Frontier vs. Data Envelopment Analysis

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  • A. M. Theodoridis

    (Aristotle University, School of Agriculture, Department of Agricultural Economics, Thessaloniki, Greece)

  • A. Psychoudakis

    (Aristotle University, School of Agriculture, Department of Agricultural Economics, Thessaloniki, Greece)

Abstract

Parametric Stochastic Frontier Analysis (SFA) and non-parametric Data Envelopment Analysis (DEA) have become very popular in the analysis of productive efficiency. This paper undertakes a comparison of the SFA and the constant returns to scale (CRS) and variable returns to scale (VRS) output-oriented DEA models, based on a sample of 165 dairy farms in Greece. However, the aim of this paper is not only to compare estimates of technical efficiency obtained from two approaches, but also to produce efficiency data about the farms studied, which have implications for agricultural policy to improve dairy production. The results indicate that there is a potential for increasing production in the dairy farms through improved efficiency

Suggested Citation

  • A. M. Theodoridis & A. Psychoudakis, 2008. "Efficiency Measurement in Greek Dairy Farms: Stochastic Frontier vs. Data Envelopment Analysis," International Journal of Business and Economic Sciences Applied Research (IJBESAR), International Hellenic University (IHU), Kavala Campus, Greece (formerly Eastern Macedonia and Thrace Institute of Technology - EMaTTech), vol. 1(2), pages 53-67, December.
  • Handle: RePEc:tei:journl:v:1:y:2008:i:2:p:53-67
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    References listed on IDEAS

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    Cited by:

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    2. Watkins, K. Bradley & Hristovska, Tatjana & Mazzanti, Ralph & Wilson, Charles E. Jr & Schmidt, Lance, 2014. "Measurement of Technical, Allocative, Economic, and Scale Efficiency of Rice Production in Arkansas Using Data Envelopment Analysis," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 46(1), pages 1-18, February.
    3. Watkins, K. Bradley & Hristovska, Tatjana & Mazzanti, Ralph & Wilson, Charles E., Jr., "undated". "Measuring Technical, Allocative, and Economic Efficiency of Rice Production in Arkansas using Data Envelopment Analysis," 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida 142962, Southern Agricultural Economics Association.
    4. Madau, Fabio A., 2015. "Technical and Scale Efficiency in the Italian Citrus Farming: Comparison between SFA and DEA Approaches," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 16(2), pages 1-13.
    5. Maganga M. Assa & Abdi-Khalil Edriss & Greenwell C. Matchaya, 2013. "Cost efficiency, Morishima, Allen-Uzawa and Cross-Price elasticities among Irish potato farmers in Dedza district, Malawi," International Journal of Business and Economic Sciences Applied Research (IJBESAR), International Hellenic University (IHU), Kavala Campus, Greece (formerly Eastern Macedonia and Thrace Institute of Technology - EMaTTech), vol. 6(1), pages 59-73, April.
    6. Yuhang Bai & Kuixing Han & Lichun Xiong & Yifei Li & Rundong Liao & Fengting Wang, 2022. "Differences and Factors of Raw Milk Productivity between China and the United States," Agriculture, MDPI, vol. 12(11), pages 1-13, November.
    7. Suela Kristo, 2013. "Efficiency of the Albanian banking system: Traditional approach and Stochastic Frontier Analysis," International Journal of Business and Economic Sciences Applied Research (IJBESAR), International Hellenic University (IHU), Kavala Campus, Greece (formerly Eastern Macedonia and Thrace Institute of Technology - EMaTTech), vol. 6(3), pages 61-78, December.
    8. Sengphachan Khounthikoumane & Jae Bong Chang & Yoonsuk Lee, 2021. "Profit Efficiency of Rice Farms in Wet-Season Lowlands in Champhone District, Savannakhet Province, Lao PDR," Agriculture, MDPI, vol. 11(7), pages 1-10, July.
    9. Nikolskiy, Ilya & Furmanov, Kirill, 2023. "Assessing the accuracy of efficiency rankings obtained from a stochastic frontier model," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 71, pages 128-142.
    10. Gangyi Wang & Chang’e Zhao & Yuzhuo Shen & Ni Yin, 2021. "Estimation of cost efficiency of fattening pigs, sows, and piglets using SFA approach analysis: Evidence from China," PLOS ONE, Public Library of Science, vol. 16(12), pages 1-22, December.
    11. Fabio A. Madau & Roberto Furesi & Pietro Pulina, 2017. "Technical efficiency and total factor productivity changes in European dairy farm sectors," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 5(1), pages 1-14, December.
    12. Gelan, Ayele & Muriithi, Beatrice W., 2015. "Examining Returns to Scale in Smallholder Dairy Farms in East Africa," Quarterly Journal of International Agriculture, Humboldt-Universitaat zu Berlin, vol. 54(3), pages 1-23, September.
    13. Vlontzos, George & Theodoridis, Alexandros, 2013. "Efficiency and Productivity Change in the Greek Dairy Industry," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 14(2), pages 1-15.
    14. Leonidas Sotirios Kyrgiakos & Georgios Kleftodimos & George Vlontzos & Panos M. Pardalos, 2023. "A systematic literature review of data envelopment analysis implementation in agriculture under the prism of sustainability," Operational Research, Springer, vol. 23(1), pages 1-38, March.
    15. repec:ags:joaaec:163230 is not listed on IDEAS
    16. G. Thomas Sav, 2012. "Efficiency Estimates and Rankings Employing Data Envelopment and Stochastic Frontier Analyses: Evaluating the Management of U.S. Public Colleges," Information Management and Business Review, AMH International, vol. 4(8), pages 444-452.
    17. Kremantzis, Marios Dominikos & Beullens, Patrick & Kyrgiakos, Leonidas Sotirios & Klein, Jonathan, 2022. "Measurement and evaluation of multi-function parallel network hierarchical DEA systems," Socio-Economic Planning Sciences, Elsevier, vol. 84(C).
    18. Han, Sang Woo & Lim, Song Soo & Balkibayeva, Aida, 2021. "Productive efficiency and trade opportunities for Kazakhstan dairy farms," Economia agro-alimentare / Food Economy, Italian Society of Agri-food Economics/Società Italiana di Economia Agro-Alimentare (SIEA), vol. 24(1), December.
    19. Ferrara, Giancarlo & Vidoli, Francesco, 2017. "Semiparametric stochastic frontier models: A generalized additive model approach," European Journal of Operational Research, Elsevier, vol. 258(2), pages 761-777.
    20. Vasiliki Papanikolopoulou & Sotiria Vouraki & Stergios Priskas & Alexandros Theodoridis & Socratis Dimitriou & Georgios Arsenos, 2023. "Economic Performance of Dairy Sheep Farms in Less-Favoured Areas of Greece: A Comparative Analysis Based on Flock Size and Farming System," Sustainability, MDPI, vol. 15(2), pages 1-11, January.
    21. Anthony N. Rezitis & Maria A. Kalantzi, 2016. "Investigating Technical Efficiency and Its Determinants by Data Envelopment Analysis: An Application in the Greek Food and Beverages Manufacturing Industry," Agribusiness, John Wiley & Sons, Ltd., vol. 32(2), pages 254-271, April.

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    More about this item

    Keywords

    Data Envelopment Analysis; Stochastic Frontier Analysis; Dairy Farms;
    All these keywords.

    JEL classification:

    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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