Efficiency of improved peeled longan drying technology in Thailand: A metafrontier approach

Sombat Singkharat (), Aree Wiboonpongse and Yaovarate Chaovanapoonphol
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Sombat Singkharat: Chiang Mai Rajabhat University
Aree Wiboonpongse: Chiang Mai University
Yaovarate Chaovanapoonphol: Chiang Mai University

The Empirical Econometrics and Quantitative Economics Letters, 2012, vol. 1, issue 3, 19-32

Abstract: In today’s markets, for manufacturing to remain competitive and productive, development and adoption of improved technology is imperative. Energy efficiency technology is a promising candidate as it can save on energy costs, thus shortening the investment payback period. In addition, it has the added benefit of reducing carbon dioxide emissions, helping mitigate global warming. Longan, a tropical fruit grown in northern Thailand, is a popular food product peeled and dried. Peeled longan drying technology is one such manufacturing process that may potentially benefit from technology improvements. The objective of this study is to analyze the potential efficiency gains from adopting an improved drying oven. The study employed Data Envelopment Analysis to examine technical efficiency and metafrontier estimation for technological impact. Forty-four dried longan processors, using conventional drying ovens, were compared with four processors using improved ovens in Lamphun Province, Thailand. As determined by the Mann-Whitney U test, the technical efficiency of the two groups differed (at 95% statistical significance), allowing for the use of a deterministically constructed metafrontier to calculate the comparable operational efficiencies of the two different technologies. The technical efficiency of the improved technology group (TEi) was higher than the conventional technology group (TEc), 0.998 compared to 0.941, respectively. The key difference between the two drying technologies was fuel consumption (at 99% statistical significance). The improved oven technology enhanced technical efficiency by reducing fuel input by 26.1% per oven. If all 305 traditional ovens were converted to the improved technology, this would reduce fuel use by approximately 60 metric tons/day, saving over THB 70,000 per day. This fuel savings would also reduce carbon dioxide emissions by 100 tons/day.

Keywords: Metafrontier; Dried longan; CO2 emissions; Energy reduction; Community enterprises (search for similar items in EconPapers)
JEL-codes: C18 (search for similar items in EconPapers)
Date: 2012
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