Measuring the impacts of production risk on technical efficiency: A state-contingent conditional order-m approach

Teresa Serra and Alfons Oude Lansink ()

European Journal of Operational Research, 2014, vol. 239, issue 1, 237-242

Abstract: This article studies the influence of risk on farms’ technical efficiency levels. The analysis extends the order-m efficiency scores approach proposed by Daraio and Simar (2005) to the state-contingent framework. The empirical application focuses on cross section data of Catalan specialized crop farms from the year 2011. Results suggest that accounting for production risks increases the technical performance. A 10% increase in output risk will result in a 2.5% increase in average firm technical performance.

Keywords: Linear programming; Data envelopment analysis; Nonparametric order-m efficiency; State-contingent technology; Risk (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (19)

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Working Paper: Measuring the impacts of production risk on technical efficiency: a state-contingent conditional order-m approach (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:239:y:2014:i:1:p:237-242

DOI: 10.1016/j.ejor.2014.05.020

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