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Technical and scale efficiency in the Italian Citrus Farming: A comparison between Stochastic Frontier Analysis (SFA) and Data Envelopment Analysis(DEA) Models

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  • Madau, Fabio A.

Abstract

This paper aims to estimate technical and scale efficiency in the Italian citrus farming. Estimation was carried out from two different approach: a non parametric and a parametric approach using a Data Envelopment Analysis (DEA) model and a Stochastic Frontier Analysis (SFA) model, respectively. Several studies have compared technical efficiency estimates derived from parametric and non parametric approaches, while a very small number of studies have aimed to compare scale efficiency obtained from different methodological approaches. This is one of the first attempts that aims to put on evidence possible difference in scale efficiency estimations in farming due to methods used. Empirical findings suggest that the greater portion of overall inefficiency in the sample might depend on producing below the production frontier than on operating under an inefficient scale. Furthermore, we found that the estimated technical efficiency from the SFA model is substantially at the same level of this estimated from DEA model, while the scale efficiency arisen from SFA is larger than this obtained from DEA analysis.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 41403.

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Date of creation: Sep 2012
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Handle: RePEc:pra:mprapa:41403

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Keywords: Technical efficiency; Scale efficiency; Data Envelopment Analysis; Stochastic Frontier Analysis; Citrus farming;

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