Cotton Farmers' Technical Efficiency: Stochastic and Nonstochastic Production Function Approaches
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Abstract
Technical efficiency for cotton growers is examined using both stochastic (SFA) and nonstochastic (DEA) production function approaches. The empirical application uses farm-level data from four counties in west Texas. While efficiency scores for the individual farms differed between SF A and DEA, the mean efficiency scores are invariant of the method of estimation under the assumption of constant returns to scale. On average, irrigated farms are 80% and nonirrigated [anus are 70% efficient. Findings show that in Texas, the irrigated farms, on average, could reduce their expenditures on other inputs by 10%, and the nonirrigated farms could reduce their expenditures on machinery and labor by 12% and 13%, respectively, while producing the same level of output.