The efficiency of the dairy sector in mainland Portugal

• Author(s): Costa, Leonardo ; Sottomayor, Miguel
• Date: 2013
• Persistent ID: http://hdl.handle.net/10400.14/14604
• Origin: Veritati - Repositório Institucional da Universidade Católica Portuguesa
• Subject(s): Bootstrapping; DEA; Economic efficiency; Input directional distance function; Portuguese mainland dairy farms
• Document Type: Article
• Language: English

Description

A two-stage Data Envelopment Analysis (DEA) approach is employed to analyse the efficiency of dairy farms in mainland Portugal. The data are a 2010 sample from the European Commission Farm Accountancy Data Network (FADN) of 271 Portuguese mainland dairy farms. In the first stage, a directional input distance function and DEA are used to generate overall inefficiency measures and decompose them for each farm. In the second stage, the inefficiency measures are regressed on environmentaland/or organizational factors to explain efficiency differentials. Despite environmental and/or organizational differences, results indicate that most dairy farms in mainland Portugal can reduce costs by improving allocative efficiency and pure technical efficiency.