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Measurement of Scale Efficiency in Dairy Farms: Data Envelopment Analysis (DEA) Approach

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  • Bassam Aldeseit

Abstract

This study aimed at evaluating the performance of sampled dairy farms using farm level technical and scale input oriented efficiencies. To achieve the objective of the study Data Envelopment Analysis (DEA) was used to analyze data collected from 120 dairy farms in Jordan. Scale efficiency scores were estimated using constant return to scale and variable return to scale DEA models. The results revealed that the sampled farms were not operating at an optimal size. On average, the scale efficiency estimated at approximately 0.66, indicating scale-inefficiency under both constant returns to scale and variable returns to scale. This inefficiency indicates that the sampled dairy producers were overusing inputs to produce their level of output. To increase scale of operation dairy farmers in Jordan should increase the overall degree of technical efficiency. Extension services can assist in identifying the best management practices on how to improve farms technical efficiency.

Suggested Citation

  • Bassam Aldeseit, 2013. "Measurement of Scale Efficiency in Dairy Farms: Data Envelopment Analysis (DEA) Approach," Journal of Agricultural Science, Canadian Center of Science and Education, vol. 5(9), pages 1-37, August.
    • Handle: RePEc:ibn:jasjnl:v:5:y:2013:i:9:p:37
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    References listed on IDEAS

    as
    1. Dalton, Timothy J., 2004. "Indivisible And Spatial Components Of Dairy Firm Efficiency," 2004 Annual meeting, August 1-4, Denver, CO 20320, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Muniz, M. A., 2002. "Separating managerial inefficiency and external conditions in data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 143(3), pages 625-643, December.
    3. Callens, Isabelle & Tyteca, Daniel, 1999. "Towards indicators of sustainable development for firms: A productive efficiency perspective," Ecological Economics, Elsevier, vol. 28(1), pages 41-53, January.
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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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