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Sub-vector Efficiency analysis in Chance Constrained Stochastic DEA: An application to irrigation water use in the Krishna river basin, India

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  • Chellattan Veettil, Prakashan
  • Ashok, Arathy
  • Speelman, Stijn
  • Buysse, Jeroen
  • Van Huylenbroeck, Guido

Abstract

All deviations from the frontier is inefficiency in deterministic DEA (DDEA); thus making the DDEA unable to accommodate the measurement and specification errors. But, most of the production relationships are stochastic in nature with some inputs fixed in the short run. This paper addressed the above two issues by formulating a sub-vector efficiency model in a Stochastic DEA (SDEA) framework to analyze the efficiency of sub vector of inputs. The results illustrate that there is a wide scope for stochastic efficiency analysis. The overall efficiency in SDEA is higher than DDEA under both Constant and Variable Return to Scale frameworks. SDEA revealed that some efficient producers are not sub-vector efficient in our case study. Thus, overall efficiency oriented policy may not be sufficient for optimizing water use. The proposed model has limitations in terms of the degree of stochastic variability and the level of tolerance that the model can accommodate

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Bibliographic Info

Paper provided by European Association of Agricultural Economists in its series 122nd Seminar, February 17-18, 2011, Ancona, Italy with number 98978.

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Date of creation: 10 Feb 2011
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Handle: RePEc:ags:eaa122:98978

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Keywords: Stochastic DEA; sub-vector efficiency; chance constrained programming; irrigation water use efficiency; Agricultural and Food Policy;

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