FREE DISPOSAL HULL (FDH), ODER-M AND ODER-ALPHA (α) EFFICIENCY ANALYSIS FOR RUBBER SMALLHOLDERS IN MALAYSIA
DOI:
https://doi.org/10.29121/granthaalayah.v6.i6.2018.1329Keywords:
Rubber, Smallholders, Technical Efficiency, Free Disposal Hull, Expected Oder-M and Oder-Α.Abstract [English]
The study examines the technical efficiency of rubber smallholders in Negeri Sembilan under 3 age categories using different method of efficiency analysis which include the Free Disposal Hull (FDH), Expected Oder-m (EOM) and Oder-Alpha (α) (O-α). The analysis was done in such a way that the rubber age was categorized in to All-age, matured-age and Old-age categories. Multistage sampling procedure was used and 307 smallholders were used comprising 307,206 and 101 for all-age, matured-age and old-age categories respectively. The result of the analysis revealed that the mean technical efficiency of all-age, matured-age and old-age crops under FDH were 1.00, 1.00 and 1.00 while that of Order-Alpha and Expected Oder-m were 0.89, 0.89, 0.90 and 0.96, 0.97 0.98 respectively for the all-age, matured-age and old-age crops categories. The percentages of rubber crop farms that are on the FDH production frontier were 100%, 100%, and 100% while under Order Alpha (α) were 13%,10 and 20%. The ones under expected order-m frontier were 29%, 39% and 52% respectively for all-age, matured-age and old-age categories. The mean TE of FDH and mean TE of Order-Alpha were subjected under paired t-test and found to be statistically different from each other. It was revealed that mean TE of FDH was statistically greater than that of Order-M efficiency. Order- M and Order-alpha efficiencies were also subjected under paired mean t-test, and the results indicated that the two means were statistically different from each other. Expected Order-M was found to be statistically higher in magnitude than its counterpart Order Alpha. The study finally concludes that FDH has higher efficiency scores than the other two partial production frontiers. Also deduced from the study was that the old-age category has higher efficiency scores than both the matured-age and all-age categories under both the EOM and Oder Alpha production frontier techniques.. So conclusively the old-age is higher than the matured-age which in turn higher than the all-age category in both the Expected Oder-m and Oder-Alpha production frontiers. Most importantly, policy planners should be very cautious on specific techniques. They should as well be knowledgeable and comparatively minded on the results obtained from both the Expected Oder-m and Oder-Alpha production frontiers with regards to the policy selections on the rubber crop.
Downloads
References
Abbasi, M., Jahanshahloo, G. R., Rostamy-Malkhlifeh, M., & Hosseinzadeh Lotfi, F. (2014). Estimation of congestion in free disposal hull models using data envelopment analysis. The Scientific World Journal, 2014. DOI: https://doi.org/10.1155/2014/427673
Ajibefun, I. A. (2008). An Evaluation of Parametric and Non-Parametric Methods of Technical Efficiency Measurement: Application to Small Scale Food Crop Production in Nigeria. Journal of Agriculture and Social Sciences (Pakistan).
Aragon, Y., Daouia, A., and Thomas-Agnan, C. (2002).Nonparametric Frontier Estimation: A Conditional Quantile-Based Approach. Econometric Theory, 21(02), 358-389.
Brown, J. J., Light, C. D., & Gazda, G. M. (1987). Attitudes Towards European, Japanese and US Cars. European Journal of Marketing, 21(5), 90-100. DOI: https://doi.org/10.1108/EUM0000000004700
Cazals, C., Florens, J. P., & Simar, L. (2002). Nonparametric Frontier Estimation: A Robust Approach. Journal of Econometrics, 106(1), 1-25. DOI: https://doi.org/10.1016/S0304-4076(01)00080-X
Daouia, A., & Simar, L. (2003). Nonparametric Efficiency Analysis: A Multivariate Conditional Quantile Approach. Journal of Econometrics, 140(2), 375-400. DOI: https://doi.org/10.1016/j.jeconom.2006.07.002
Daraio, C., & Simar, L. (2007). Introducing Environmental Variables in Nonparametric Frontier Models: A Probabilistic Approach. Journal of Productivity Analysis, 24(1), 93-121. DOI: https://doi.org/10.1007/s11123-005-3042-8
D'astous, A., & Ahmed, S. A. (1999).The Importance of Country Images in the Formation of Consumer Product Perceptions. International Marketing Review, 16(2), 108-126. DOI: https://doi.org/10.1108/02651339910267772
Debreu, G. (1951). The Coefficient of Resource Utilization. Econometrica: Journal of the Econometric Society, 273-292. DOI: https://doi.org/10.2307/1906814
Deprins, D., & Simar, L. (1984). Measuring Labor Effi Ciency in Post of (Fices. In Marchand M., P. Pestieau And H. Tulkens (Eds.), The Performance of Public Enterprises: Concepts and Measurements.
Farrell, M. J. (1957). The Measurement of Production Efficiency. Journal of Royal Statistical Society Series A. 120: 253-290.
Koopmansa, T. C. (1951). An Analysis of Production as an Efficient Combination of Activities, Activity Analysis of Production and Allocation. Tc Koopmans. Ed.).Wiley. New York.
Lim, B., Lee, K., & Lee, C (2013). Free Disposal Hull (FDH) Analysis for Efficiency Measurement: An Update to DEA.
Mcfadden, D. (1978). Cost, Revenue, And Profit Functions. History of Economic Thought Chapters,1.
Papadopoulos, N., Heslop, L. A., & Bamossy, G. (1994). An International Comparative Analysis of Consumer Attitudes Toward Canada And Canadian Products. Canadian Journal of Administrative Sciences/Revue Canadienne Des Sciences De L'administration, 11(3), 224-239. DOI: https://doi.org/10.1111/j.1936-4490.1994.tb00063.x
Simar, L. And Wilson, P. (2014). Estimation and Inference in Two-Stage, Semi-Parametric Models of Production Process, Journal of Econometrics, 136:3164
Shephard, R. W. (1970). Theory of Cost and Production Functions Princeton University Press. Princeton, New Jersey.
Simar, L and Wilson, P. W. (2000). Statistical Inference in Nonparametric Frontier Models: The State Of The Art. Journal of Productivity Analysis, 13(1), 49-78. DOI: https://doi.org/10.1023/A:1007864806704
Simar, L. (2000). Detecting Outliers in Frontier Models: A Simple Approach. Journal of Productivity Analysis, 20(3), 391-424. DOI: https://doi.org/10.1023/A:1027308001925
Thiry, B., & Tulkens, H. (1989). Productivity, Efficiency and Technical Progress. Annals of Public and Cooperative Economics, 60(1), 9-42. DOI: https://doi.org/10.1111/j.1467-8292.1989.tb02007.x
Tulkens, H., & Eeckaut, P. V. (1995). Non-Parametric Efficiency, Progress and Regress Measures for Panel Data: Methodological Aspects. European Journal of Operational Research, 80(3), 474-499. DOI: https://doi.org/10.1016/0377-2217(94)00132-V
Tulkens, H. (2006). On Fdh Efficiency Analysis: Some Methodological Issues And Applications To Retail Banking, Courts and Urban Transit in Public Goods, Environmental Externalities and Fiscal Competition (Pp. 311-342). Springer US.
Http://Www.Kppk.Gov.My/Mpic/Index.Php/En/Statistic-On Commodity/Dataset/713.
Downloads
Published
How to Cite
Issue
Section
License
With the licence CC-BY, authors retain the copyright, allowing anyone to download, reuse, re-print, modify, distribute, and/or copy their contribution. The work must be properly attributed to its author.
It is not necessary to ask for further permission from the author or journal board.
This journal provides immediate open access to its content on the principle that making research freely available to the public supports a greater global exchange of knowledge.
