Cost efficiency analysis in aquaculture: Data envelopment analysis with a two-stage bootstrapping technique

Abstract

This study employed data envelopment analysis with a two-stage bootstrapping technique to analyze cost efficiency in aquaculture using the case of intensive white-leg shrimp farming in Phu Yen province, Vietnam. By adopting the bootstrap procedure in the first stage, the bias-corrected point estimate of cost efficiency was 0.604 with the lower limit of 0.541 and the upper limit of 0.687 at the 95% confidence interval. Moreover, allocative inefficiency, implying the inappropriateness of input mixes—given their respective prices—was found to be the primary cause of cost inefficiency in this aquaculture. The result from bootstrap truncated regression in the second stage suggested that lower input levels of chemicals/drugs and fingerlings and higher input levels of feed used per ha may help to increase the cost-efficiency of shrimp farming. Policies for better access to formal credit are very important in improving cost efficiency in this aquaculture.