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Efficiency and Returns to Scale Measurements with Shared Inputs in Multi-Activity Data Envelopment Analysis: An Application to Farmers' Organizations in Taiwan

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  • Chen, Po-Chi
  • Chang, Ching-Cheng
  • Hsu, Shih-Shun

Abstract

This paper addresses the question how team production promotes efficiency of a firm when some inputs can be rewarded on the basis of outputs but some cannot because they are shared among outputs and non-separable. A multi-activity DEA model with variable returns to scale is proposed to provide information on the efficiency performance for organizations with inputs shared among several closely related activities. The model is applied to study the case of 279 farmers' associations in Taiwan. The result suggests that it is important to improve the efficiency of the non-profit oriented activities to improve their overall performances. Three out of four departments of TFAs can gain from economies of scale through expansion, while the remaining one gains through contraction. Thus, policies promoting structural adjustment and consolidations of TFAs would not be inconsistent with public interests.

Suggested Citation

  • Chen, Po-Chi & Chang, Ching-Cheng & Hsu, Shih-Shun, 2007. "Efficiency and Returns to Scale Measurements with Shared Inputs in Multi-Activity Data Envelopment Analysis: An Application to Farmers' Organizations in Taiwan," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon 9781, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea07:9781
    DOI: 10.22004/ag.econ.9781
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    Keywords

    Productivity Analysis;

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