A Restricted Data Envelopment Analysis Application to Dairy Farming

Suggested Citation
Alexandros M. Theodoridis and Athanasios Ragkos (2015), “A Restricted Data Envelopment Analysis Application to Dairy Farming”, Data Envelopment Analysis Journal: Vol. 1: No. 2, pp 171-193. http://dx.doi.org/10.1561/103.00000007
Publication Date: 30 Jul 2015
© 2015 A. M. Theodoridis and A. Athanasios
Cost management,  Productivity measurement and analysis,  Small business and economic growth
Data envelopment analysis, Weight restrictions, Dairy farms


In this article:
1. Introduction
2. Methodological Approach
3. Data
4. Results
5. Conclusions


In this study the technical efficiency level of dairy farms in Greece is estimated by imposing weight restrictions on the conventional data envelopment analysis (DEA) model. The assurance region approach is applied on farm record and accounting data from 165 dairy farms. The numerical values of the weight bounds are determined by placing limits on the estimated output elasticities and on the factors’ cost share of the total production cost. The imposition of bounds on the DEA weights provides more persuasive efficiency scores and alters the structure of the efficient farms, verifying the importance of placing weight restrictions when dealing with real-life applications.


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