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Technical, Pure Technical and Scale Efficiency of Primary Agriculture Cooperative Credit Societies in Tamil Nadu

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  • Murugesan Raman

    (Natesan Institute of Cooperative Management)

Abstract

This paper analyses input-oriented Data Envelopment Analysis to the measurement of technical efficiency of 110 Primary Agriculture Cooperative Credit Societies (PACS) in Tamil Nadu in India. With specification of different inputs and outputs, this study uses three approaches, namely intermediation, operating and value-added, to find out efficiency levels of PACS (known as DMUs). A number of DMUs are operating in the zone of increasing returns to scale. One-third of the DMUs are operating with the constant returns to scale. DMUs with own resources have high technical efficiency. In the second stage, Tobit model was utilized for understanding the determinants of technical efficiency, pure technical efficiency and scale efficiency of DMUs. Tobit censured regressions were estimated with maximum likelihood techniques. Self-help groups and Kissan Credit Cards hold high growth potentials for PACS in business strategy for expansion contributing to overall technical efficiency. A large portion of technical inefficiency among DMUs could be attributed to pure technical inefficiency emanating from managerial decision making on choice of inputs mix and choice of outputs produced than to the size and scale of operations undertaken by DMUs in rural areas.

Suggested Citation

  • Murugesan Raman, 2025. "Technical, Pure Technical and Scale Efficiency of Primary Agriculture Cooperative Credit Societies in Tamil Nadu," Lecture Notes in Operations Research,, Springer.
    • Handle: RePEc:spr:lnopch:978-3-031-98177-7_16
    DOI: 10.1007/978-3-031-98177-7_16
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