How Might Shadow Price Restrictions Reduce Technical Efficiency? Evidence from a Restricted DEA Analysis of Coffee Farms in Vietnam

Authors

  • Andres F. Garcia,

  • Gerald E. Shively

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    • Gerald Shively is with the Department of Agricultural Economics, Purdue University and also with the Department of Economics and Resource Management, Norwegian University of Life Sciences. E-mail: shivelyg@purdue.edu for correspondence. Andres Garcia is with the Young Professionals Program, The World Bank, Washington, DC 20043, USA. For helpful advice and suggestions the authors thank Paul Preckel, Ana Rios seminar participants at CATIE and anonymous reviews. This research was made possible through support provided by the Office of Agriculture and Food Security, Bureau for Global Programs, US Agency for International Development, under the terms of the SANREM and AMA BASIS CRSP Awards. The opinions expressed herein are those of the authors and do not necessarily reflect the views of the US Agency for International Development.


Abstract

We use data from smallholder coffee farms in Vietnam to measure the technical efficiency of coffee producers, and the degree to which potential restrictions on the shadow prices of chemical inputs might reduce overall efficiency among these farmers. Using input-oriented data envelopment analysis (DEA) we find the use of pesticide and herbicide accounts for a relatively small proportion of overall technical efficiency in the sample. We place restrictions on input shadow prices and show that restricting their importance does not dramatically alter patterns or measures of short-run efficiency.

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