Management Theory and Studies for Rural Business and Infrastructure Development, Volume 35, Number 3

Estimation of the efficiency of the Lithuanian family farms via the order-m frontiers

Alvydas Baležentis

Abstract

The paper aimed at analysing the patterns of efficiency of the Lithuanian family farms with respect to the uncertain data. The latter aim was achieved by the virtue of the probabilistic production functions. The sensitivity of the efficiency scores estimated for the Lithuanian family farms was analysed by manipulating the numbers of randomly drawn benchmark observations estimations and thus constructing respective order-m frontiers. The livestock farms appeared to be most efficient, or even super-efficient, independently of the model orientation or the order of the frontier. The crop farms exhibited the lowest mean efficiency as well as the widest distribution of the efficiency scores. The mixed farming was more related to the livestock farming in case of the input–oriented framework and to the crop farming in the output-oriented one in terms of the mean efficiency scores. Thus, the mixed farms were located inside the production frontier (surface) in a rather compact way.

JEL codes: C140, C440, D240, Q120.

Keyword(s): efficiency, family farms, order-m frontier, activity analysis


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Management Theory and Studies for Rural Business and Infrastructure Development eISSN 2345-0355

This journal is published under the terms of the Creative Commons Attribution-Noncommercial 3.0 Unported License. Responsible editor: Dr Audrius Gargasas.