Coordination Efficiency in Multi-Output Settings: A DEA Approach

Cherchye, Laurens; Rock, Bram De; Hennebel, Veerle

doi:10.2139/ssrn.2509278

Cited by 5 publications

(16 citation statements)

References 16 publications

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“…Using this framework, Cherchye et al . () address the question of efficient allocation of common output‐specific inputs over subdivisions. They develop a coordination efficiency measure that quantifies the possible efficiency gains from reallocating some inputs over the subdivisions.…”

Section: Introductionmentioning

confidence: 99%

To Mix or Specialise? A Coordination Productivity Indicator for English and Welsh farms

Ang¹,

Kerstens²

2016

J Agricultural Economics

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This paper introduces a nonparametric measure of coordination productivity growth where the subprocesses are explicitly modelled in the production technology. The coordination productivity indicator is decomposed into a coordination technical inefficiency change component and a coordination technical change component. This decomposition allows assessment of reallocation impacts on the different sources of productivity growth. The empirical application focuses on a large panel of English and Welsh farms over the period 2007–2013. The results show that coordination inefficiency significantly increases with the proportion of resources allocated to livestock production in economic and statistical terms. Coordination inefficient farms should generally allocate more land to crop production. Depending on the region, the average coordination productivity growth ranges from −9.7% to 15.9% per year. It is driven by coordination technical change rather than coordination inefficiency change.

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Section: Introductionmentioning

confidence: 99%

To Mix or Specialise? A Coordination Productivity Indicator for English and Welsh farms

Ang¹,

Kerstens²

2016

J Agricultural Economics

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“…In line with Cherchye et al . (, ), we make a distinction between joint and output‐specific inputs. A joint input cannot be allocated to one specific output and is thus needed for the production of multiple outputs.…”

Section: Methodsmentioning

confidence: 99%

“…(), Ang and Kerstens () and Cherchye et al . (), the preceding intertemporal profit‐maximisation problem can also be adapted to programme (B) where land use L m is optimally reallocated among M crops for each farm

j \in {double-struckR}_{+}^{J}

r W {()(, p, w, K, c)}^{(2)} = \underset{(}{, y, x, I, L_{m}^{*}, γ)}{falsemax} \{p^{'} y - w^{'} x + W_{K} {()(.)}^{'} (I - δ K)\}

s.t .

y_{m} \leq {false\sum}_{j = 1}^{J} γ_{m}^{j} y_{m}^{j}, m = 1, \dots, M

{false\sum}_{j = 1}^{J} γ_{m}^{j} x^{j} \leq x_{n}, m = 1, \dots, M, n = 1, \dots, N

(I_{f} - δ_{f} K_{f}) \leq {false\sum}_{j = 1}^{J} γ_{m}^{j} (I_{f}^{j} - δ_{f} K_{f}^{j}), m = 1, \dots, M, f = 1, \dots, F

{false\sum}_{j = 1}^{J} γ_{m}^{j} G^{j} \leq G_{z}, m = 1, \dots, M, z = 1, \dots, Z

…”

Section: Methodsmentioning

confidence: 99%

“…Cherchye et al . () show how one can take into account the output‐specific character of inputs and the extent to which reallocation of these inputs over outputs can increase efficiency. We adapt their input distance function framework to Ang and Oude Lansink ()'s dynamic profit‐maximisation framework and focus on the optimal reallocation of output‐specific land use.…”

Section: Introductionmentioning

confidence: 99%

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On the Opportunity Cost of Crop Diversification

Ang¹,

Mortimer²,

Tiffin³

2018

J Agricultural Economics

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Distance functions are increasingly being augmented, with environmental goods treated as conventional outputs. A common approach to evaluate the opportunity cost of providing an environmental good is the exploitation of the distance function's dual relationship to the value function. This implies that the opportunity cost is assumed to be non-negative. This approach also requires a convex technology set. Focusing on crop diversification for a balanced sample of 44 cereal farms in the East of England for the years 2007-2013, this paper develops a novel opportunity cost measure that does not depend on these strong assumptions. We find that the opportunity cost of crop diversification is negative for most farms.

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“…In this definition, each g Z m represents the directional distance vector for the output m. 7 Equivalently, we can also express it as…”

Section: Multi-output Profit Efficiencymentioning

confidence: 99%

Multi-output profit efficiency and directional distance functions

Cherchye

Rock

Walheer

2016

Omega

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We extend a recently developed DEA methodology for cost efficiency analysis towards profit efficiency settings. This establishes a novel DEA toolkit for profit efficiency assessments in situations with multiple inputs and multiple outputs. A distinguishing feature of our methodology is that it assumes outputspecific production technologies. In addition, the methodology accounts for the use of joint inputs, and explicitly includes information on the allocation of inputs to individual outputs. We also establish a dual relationship between our multi-output profit inefficiency measure and a technical inefficiency measure that takes the form of a multi-output directional distance function. 1we demonstrate the empirical usefulness of our methodology by an empirical application to a large service company.

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Coordination Efficiency in Multi-Output Settings: A DEA Approach

Cited by 5 publications

References 16 publications

To Mix or Specialise? A Coordination Productivity Indicator for English and Welsh farms

To Mix or Specialise? A Coordination Productivity Indicator for English and Welsh farms

On the Opportunity Cost of Crop Diversification

Multi-output profit efficiency and directional distance functions

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