A NONPARAMETRIC EFFICIENCY ANALYSIS OF CALIFORNIA COTTON GINNING COOPERATIVES
By: Caputo, Michael R.; Lynch, Lori
Caputo, Michael R.; Lynch, Lori, A NONPARAMETRIC EFFICIENCY ANALYSIS OF CALIFORNIA COTTON GINNING COOPERATIVES, Journal of Agricultural and Resource Economics, Volume 18, Issue 2, December 1993, Pages 251-265
In the spirit of Leamer's commitment to sensitivity analysis, we employ Farrell's nonparametric efficiency methodology and compare our results with those of Sexton, Wilson, and Wann. Testing the implicit assumption of technical efficiency in the methodology employed by Sexton, Wilson, and Wann, we find that the lack of technical efficiency is the cotton gins' main cause of overall inefficiency. We extend the nonparametric methodology by subjecting the shadow prices of technical efficiency to nonparametric statistical tests to draw stronger conclusions. In addition, the nonparametric methodology permits us to make gin-specific recommendations to improve the performance of the gins.