Technical efficiency for a sample of Chilean wine grape producers: A stochastic production frontier analysis

Abstract

V.H. Moreira, J.L. Troncoso, and B.E. Bravo-Ureta. 2011. Technical efficiency for a sample of Chilean wine grape producers: A stochastic production frontier analysis. Cien. Inv. Agr. 38(3):321-329. Chile has become an increasingly important player in international wine markets. Concurrent with the expansion of Chilean wine output and exports, there has been an increase in production in several other "New World" countries including Argentina, Australia, New Zealand and South Africa. The overall growth in wine supplies has increased competition to capture market share, which highlights the importance of productivity gains among wine and grape producers. The purpose of this paper is to estimate and analyze the technical efficiency (TE) component of productivity for a sample of wine grape producers in Chile. The data includes 38 farms with specific input-output information for individual blocks yielding a total of 263 observations. We use a Cobb-Douglas model to estimate a stochastic production frontier (SPF) and to obtain TE scores both at the individual block and at the farm level. The results suggest that the average farm level TE is 77.2%, while the block level TE ranges from 23.4 to 95.0%. The value of the function coefficient is 1.021, which suggests nearly constant returns to size.

Efficiency in wine grape production: comparing long‐established and newly developed regions of South Africa

“…Moreira et al. () also use a Cobb‐Douglas form of the stochastic frontier model with a sample of 38 Chilean quality wine grape producers. RTS are found to be close to constant (elasticities sum to 1.02) and mean technical efficiency is 77.8%.…”

Drivers of Wine Production in the European Union: A Macroeconomic Perspective

“…Henriques et al (2009) use a stochastic production function for 22 wine grape farms in Portugal and find a positive influence of size on the efficiency of wineries. Moreira et al (2011) apply a Cobb-Douglas production function on wine grape producers in Chile and find a strong relationship between certain vineyard training systems and yields per hectare. Tóth and Gál (2014) develop a Cobb-Douglas production function for major wine-producing countries and find that new world wine countries are more efficient.…”

Efficiency of wine grape growers at farm level: a case study

“…Several studies have already estimated the productive efficiency in wine sector. Marta-Costa et al [12], Freitas [13], Coelli and Sanders [14], Moreira et al [15] and Henriques et al [16] put their efforts into studies that aim the efficiency calculation of the grape producers, while Sellers-Rubio et al [17], Sellers-Rubio & Más-Ruiz [18] and Aparicio et al [10] studied the efficiency at the wineries level. Urso et al [19] acquaint the efficiency of grape and wine producers in the same paper.…”

“…Tóth & Gal [20], Coelli & Sanders [14], Moreira [15] and Freitas [13] studied the quantity of output produced, while Marta-Costa et al [12], Urso et al [19], Sellers-Rubio et al [17], Sellers-Rubio & Más-Ruiz [18], Aparicio et al [10], Vidal et al [21] and Henriques et al [16] studied the value of output that was produced. Regarding the input variables, there are three variables mostly used in the precedent articles: labour, capital and land.…”