EFFICIENCY CHANGE AND TECHNOLOGICAL PROGRESS IN THE U.S. CATFISH-PROCESSING SECTOR, 1986 TO 2005

Abstract

Productivity growth of the catfish-processing sector in the United States was measured over the time period of 1986 through 2005. The analysis evaluated the efficiency with which products are produced by catfish processing plants. The Malmquist index is employed to decompose the total factor productivity into growth associated with technical efficiency change and technological progress. The relationship between Farrell's measure of technical efficiency and the Shepard's distance function provides the theoretical foundation for estimating the Malmquist production index using data envelopment analysis. The results indicate that, between 1986 and 2005, there was no technical progress or adoption of new techniques with significant impact on catfish processing. Technical efficiency change, which is associated with input use efficiency, varied with type of fish size processed. It decreased from 1985 to 1995 as the industry struggled to establish the most efficient fish size to process. Between 1995 and 2005 the fluctuation continued but at a higher mean. Productivity growth and long-term competitiveness are likely to result from adoption of new processing innovations by the catfish-processing sector.