Assessment of the technical efficiency of the eel aquaculture industry in Taiwan

Abstract

The purpose of this research was to evaluate the production frontier and the technical efficiency of the eel aquaculture industry in Taiwan. Following the lead of Battese and Coelli (1995), the stochastic production frontier model was used in this study. The production frontier of the eel aquaculture industry in Taiwan was estimated first, then the efficiency for each individual eel farm was generated. Through the specification of the technical inefficiency model, the factors that may affect the productive performance are discussed. The original data for the research came from the survey of 48 eel farms in 1998 and were collected from Changhwa, Yunlin, Chiayi, Tainan and Kaohsiung. The estimated results imply that seed, labor, land and capital are relatively important in eel production in Taiwan. At the 5 percent significance level, the owner's culture experiences, the pond age and degree of automation showed significant influences on the farmers' technical efficiencies. The results also show that farmers' efficiencies was between 0.8 and 0.9 . The average technical efficiency for the sample farms was 0.87.