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Measuring Technical Efficiency of Dairy Farms with Imprecise Data: A Fuzzy Data Envelopment Analysis Approach

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  • Mugera, Amin W.

Abstract

This article integrates fuzzy set theory in Data Envelopment Analysis (DEA) framework to compute technical efficiency scores when input and output data are imprecise. The underlying assumption in convectional DEA is that inputs and outputs data are measured with precision. However, production agriculture takes place in an uncertain environment and, in some situations, input and output data may be imprecise. We present an approach of measuring efficiency when data is known to lie within specified intervals and empirically illustrate this approach using a group of 34 dairy producers in Pennsylvania. Compared to the convectional DEA scores that are point estimates, the computed fuzzy efficiency scores allow the decision maker to trace the performance of a decision-making unit at different possibility levels.

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Bibliographic Info

Paper provided by Agricultural and Applied Economics Association in its series 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania with number 103251.

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Date of creation: 2011
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Handle: RePEc:ags:aaea11:103251

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Keywords: fuzzy set theory; Data Envelopment Analysis; membership function; α-cut level; technical efficiency; Farm Management; Production Economics; Productivity Analysis; Research Methods/ Statistical Methods; Risk and Uncertainty; D24; Q12; C02; C44; C61;

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  1. A. Hadi‐Vencheh & R. Kazemi Matin, 2011. "An application of IDEA to wheat farming efficiency," Agricultural Economics, International Association of Agricultural Economists, vol. 42(4), pages 487-493, 07.
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