Estimating Economic Efficiency under Risk for Agricultural Cooperatives

Krishna P. Pokharel, Allen Featherstone and David W. Archer

No 266729, 2018 Annual Meeting, February 2-6, 2018, Jacksonville, Florida from Southern Agricultural Economics Association

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.

Keywords: Agribusiness; Agricultural Finance (search for similar items in EconPapers)
Date: 2018-01-17
New Economics Papers: this item is included in nep-agr and nep-eff
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/266729/files/Pokharel_EfficiencySAEA2018.pdf (application/pdf)
https://ageconsearch.umn.edu/record/266729/files/P ... 8.pdf?subformat=pdfa (application/pdf)

Related works:
Journal Article: ESTIMATING ECONOMIC EFFICIENCY UNDER RISK FOR AGRICULTURAL COOPERATIVES (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:saea18:266729

DOI: 10.22004/ag.econ.266729

Access Statistics for this paper

More papers in 2018 Annual Meeting, February 2-6, 2018, Jacksonville, Florida from Southern Agricultural Economics Association Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().