ESTIMATING ECONOMIC EFFICIENCY UNDER RISK FOR AGRICULTURAL COOPERATIVES
Journal Title: International Journal of Food and Agricultural Economics - Year 2019, Vol 7, Issue 2
Abstract
This study examined the impact of downside risk on cost efficiency (CE) and revenue efficiency (RE) for a sample of agricultural cooperatives. Downside risk is an appropriate measure of risk as it accounts for loss below the target return level regardless of individuals’ risk preference. The semi-variance of return on equity was used a measure of downside risk. CE and RE were estimated using data envelopment analysis (DEA) without adjusting for downside risk and then re-estimated adjusting for downside risk. The average CE and RE scores were higher with the inclusion of downside risk than the scores without downside risk. The DEA method without accounting for risk overestimates inefficiency and may misguide managers on adjustments needed to improve performance.
Authors and Affiliations
Krishna Prasad Pokharel, Allen M. Featherstone Featherstone, David W. Archer
Keywords
Related Articles
- EP ID EP573898
- DOI -
- Views 129
- Downloads 0
CLIMATE AND GOVERNMENT'S GUARANTEED PRICE POLICY EFFECTS ON THE MAJOR OILSEEDS CULTIVATION AREA AND LAND RENTAL IN IRAN
One of the important targets of government policy in agriculture sector is to increase the cultivation area and production level of strategic goods such as oilseeds due to the wide dependence on imports in the supply cha...
IMPACT OF CLIMATE CHANGE ON FOOD PRICE IN THE AFFECTED PROVINCES OF EL NINO AND LA NINA PHENOMENON: CASE OF INDONESIA
Climate change has become a global issue because it has a wide impact on a country’s socio-economic condition. The main factor influencing climate change in Indonesia is El Nino Southern Oscilliation (ENSO), consisting o...
MODELLING INTERNATIONAL OILSEED PRICES: AN APPLICATION OF THE STRUCTURAL TIME SERIES MODEL
The fundamentals characterizing agricultural commodity prices have often been debated in research and policy circles. Building on limitations in the existing literature, the present study conducts an integrated test and...
THE IMPACT OF EDUCATION ON AGRICULTURAL PRODUCTIVITY: EVIDENCE FROM EAST ASIAN ECONOMIES
This study presents an efficient version of test for the hypothesis that education plays a key role in influencing agricultural productivity based on a switching regression model. In the present setting, farmers’ ability...
THE IMPACT OF MINIMUM WAGE ON FOOD AWAY FROM HOME EXPENDITURE USING STRUCTURAL EQUATION MODEL
This paper develops the proxy variable for food away from home price to solve the omitted variable problem in FAFH expenditure. Secondly, this paper incorporates two equations for FAFH price and demand to capture the min...