Technical and cost efficiency of rural household apple production

Abstract

Purpose – At the center of apple production province in China, how to increase apple per unit yield and to improve apple production efficiency in Shaanxi become big issues. The objectives of this paper are to investigate the technical efficiency (TE) and cost efficiency (CE) of apple orchard and to analyse determinants which affect apple production efficiency. The paper aims to discuss these issues.Design/methodology/approach – This paper conducts a two‐stage DEA to achieve the objectives. In the first‐stage, a cost minimization model is applied to measure apple production efficiency. Then, a Tobit model is provided to estimate regression coefficients which are used to adjust the efficiency scores in the first‐stage.Findings – The results indicate that TE and CE are rather low in Shaanxi. The research also explores that the inefficient production of apple farmers is caused mainly by two aspects. One is the inefficient apple orchards operation of farmers. The other is the disadvantageous environmental cond...