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Assessing Technical Efficiency of Sugar Industry in Uttar Pradesh: An Application of Data Envelopment Analysis



    (Guru Nanak Dev University, Amritsar, Punjab, India)


    (Guru Nanak Dev University, Amritsar, Punjab, India)


Using the data of 86 sugar mills operating in the year 2003-04, this study endeavours to gauge the extent of technical efficiency in the sugar industry of Uttar Pradesh (UP) by employing the technique of data envelopment analysis (DEA). The empirical results reveal that mean overall technical inefficiency (OTIE) is about 19 percent, and both managerial and scale inefficiencies contribute almost equal to observed OTIE. Also, a majority of firms need downsizing in the scale of their operations. The regression results indicate that public ownership adversely affects the operating efficiency of firms, and a weak learning-by-doing effect exists in the sugar industry of UP.

Suggested Citation

  • Kumar, Sunil & Arora, Nitin, 2011. "Assessing Technical Efficiency of Sugar Industry in Uttar Pradesh: An Application of Data Envelopment Analysis," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 46(2), pages 323-353.
  • Handle: RePEc:dse:indecr:0041

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    More about this item


    Sugar Industry; Uttar Pradesh; Data Envelopment Analysis; Ownership; Tobit Regression;

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy


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