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Efficiency Measurement in Greek Dairy Farms: Stochastic Frontier vs. Data Envelopment Analysis

Listed author(s):
  • A. M. Theodoridis

    (Aristotle University, School of Agriculture, Department of Agricultural Economics, Thessaloniki, Greece)

  • A. Psychoudakis

    ()

    (Aristotle University, School of Agriculture, Department of Agricultural Economics, Thessaloniki, Greece)

Registered author(s):

    Parametric Stochastic Frontier Analysis (SFA) and non-parametric Data Envelopment Analysis (DEA) have become very popular in the analysis of productive efficiency. This paper undertakes a comparison of the SFA and the constant returns to scale (CRS) and variable returns to scale (VRS) output-oriented DEA models, based on a sample of 165 dairy farms in Greece. However, the aim of this paper is not only to compare estimates of technical efficiency obtained from two approaches, but also to produce efficiency data about the farms studied, which have implications for agricultural policy to improve dairy production. The results indicate that there is a potential for increasing production in the dairy farms through improved efficiency

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    Article provided by Eastern Macedonia and Thrace Institute of Technology (EMATTECH), Kavala, Greece in its journal International Journal of Economic Sciences and Applied Research (IJESAR).

    Volume (Year): 1 (2008)
    Issue (Month): 2 (December)
    Pages: 53-67

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    Handle: RePEc:tei:journl:v:1:y:2008:i:2:p:53-67
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    3. Banker, Rajiv D. & Thrall, R. M., 1992. "Estimation of returns to scale using data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 62(1), pages 74-84, October.
    4. Coelli, Tim J., 1995. "Recent Developments In Frontier Modelling And Efficiency Measurement," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 39(03), December.
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    6. Subal C. Kumbhakar & Almas Heshmati, 1995. "Efficiency Measurement in Swedish Dairy Farms: An Application of Rotating Panel Data, 1976–88," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(3), pages 660-674.
    7. Kalaitzandonakes, Nicholas G. & Dunn, Elizabeth G., 1995. "Technical Efficiency, Managerial Ability And Farmer Education In Guatemalan Corn Production: A Latent Variable Analysis," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 24(1), April.
    8. Tauer, Loren W. & Mishra, Ashok K., 2006. "Can the small dairy farm remain competitive in US agriculture?," Food Policy, Elsevier, vol. 31(5), pages 458-468, October.
    9. Jondrow, James & Knox Lovell, C. A. & Materov, Ivan S. & Schmidt, Peter, 1982. "On the estimation of technical inefficiency in the stochastic frontier production function model," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 233-238, August.
    10. Alfons Weersink & Calum G. Turvey & Abdulahi Godah, 1990. "Decomposition Measures of Technical Efficiency for Ontario Dairy Farms," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 38(3), pages 439-456, November.
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    13. Kalaitzandonakes, N.G. & Dunn, E.G., 1995. "Technical Efficiency, Managerial Ability and Farmer Education in Guatemalan Corn Production: A Latent Variable Analysis," Agricultural and Resource Economics Review, Cambridge University Press, vol. 24(01), pages 36-46, April.
    14. Khem Sharma & Pingsun Leung & Halina Zaleski, 1997. "Productive Efficiency of the Swine Industry in Hawaii: Stochastic Frontier vs. Data Envelopment Analysis," Journal of Productivity Analysis, Springer, vol. 8(4), pages 447-459, November.
    15. Rafael Cuesta, 2000. "A Production Model With Firm-Specific Temporal Variation in Technical Inefficiency: With Application to Spanish Dairy Farms," Journal of Productivity Analysis, Springer, vol. 13(2), pages 139-158, March.
    16. Boris E. Bravo-Ureta & Laszlo Rieger, 1991. "Dairy Farm Efficiency Measurement Using Stochastic Frontiers and Neoclassical Duality," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(2), pages 421-428.
    17. A. Charnes & W. W. Cooper & E. Rhodes, 1981. "Evaluating Program and Managerial Efficiency: An Application of Data Envelopment Analysis to Program Follow Through," Management Science, INFORMS, vol. 27(6), pages 668-697, June.
    18. Alfons Weersink & Calum G. Turvey & Abdulahi Godah, 1990. "Decomposition Measures of Technical Efficiency for Ontario Dairy Farms," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 38(4), pages 1023-1023, December.
    19. Seiford, Lawrence M. & Thrall, Robert M., 1990. "Recent developments in DEA : The mathematical programming approach to frontier analysis," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 7-38.
    20. R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
    21. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
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