Data envelopment analysis methods in sustainable agricultural development research
Data envelopment analysis methods in sustainable agricultural development research

Author(s): Katarzyna Smędzik-Ambroży, Agnieszka Sapa
Subject(s): Economy, Agriculture, Energy and Environmental Studies, Environmental and Energy policy, Methodology and research technology, Business Ethics, Socio-Economic Research
Published by: Wydawnictwo Uniwersytetu Ekonomicznego w Poznaniu
Keywords: Data Envelopment Analysis (DEA);economics sustainability;effect of scale;farms;technical efficiency;European Union (EU);
Summary/Abstract: Sustainable development of business entities can be analysed in terms of three dimensions, i.e., economic, social and environmental ones. The economic dimension of sustainable development can be assessed, inter alia, by entities’ technical efficiency defined as the relation of outputs to inputs. One of the methods that is used to assess the technical efficiency of business entities compared to other entities is the Data Envelopment Analysis (DEA) method. The aim of the chapter is to determine the relative technical efficiency of representative agricultural farms from the individual European Union countries in 2018. Moreover, the scale efficiency indexes and the area of scale effects (increasing or decreasing) of the analysed farms were also determined. In the study the data from the Farm Accountancy Data Network (FADN) for 2018 were applied. In order to achieve the assumed research goals, the input-oriented DEA model was used, and the technical efficiency indexes of farms were estimated with the assumption of constant return to scale (CRS) and variable return to scale (VRS). This allowed, among others, for indicating the countries with farms achieving the highest technical efficiency (Belgium, Spain, Italy, Malta and Netherlands assuming CRS, and Belgium, Spain, Italy, Malta and Netherlands, Greece, Ireland, Romania and Slovenia assuming VRS), the lowest technical efficiency (the Czech Republic and Slovakia) within surveyed group of farms. All relatively inefficient farms (except Slovakia) functioned in the area of increasing economies of scale.

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