(Luận văn) technical efficiency of poultry farms in vietnam non parametric and parametric approaches

UNIVERSITY OF ECONOMICS HO CHI MINH CITY VIETNAM INSTITUTE OF SOCIAL STUDIES THE HAGUE THE NETHERLANDS t to ng hi ep VIETNAM - NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS w n lo ad ju y th yi pl ua al TECHNICAL EFFICIENCY OF n POULTRY FARMS IN VIETNAM va n NON-PARAMETRIC AND PARAMETRIC APPROACHES ll fu oi m at nh z z k jm NGUYỄN THỊ NGỌC LINH ht vb BY om l.c gm n a Lu MASTER OF ARTS IN DEVELOPMENT ECONOMICS n va y te re HO CHI MINH CITY, DECEMBER 2013 UNIVERSITY OF ECONOMICS HO CHI MINH CITY VIETNAM INSTITUTE OF SOCIAL STUDIES THE HAGUE THE NETHERLANDS t to ng hi ep VIETNAM - NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS w n lo ad ju y th yi pl TECHNICAL EFFICIENCY OF al n ua POULTRY FARMS IN VIETNAM va n NON-PARAMETRIC AND PARAMETRIC APPROACHES ll fu oi m nh at A thesis submitted in partial fulfilment of the requirements for the degree of z z MASTER OF ARTS IN DEVELOPMENT ECONOMICS ht vb k jm om NGUYỄN THỊ NGỌC LINH l.c gm BY n va y te re DR TRƢƠNG ĐĂNG THỤY n a Lu Academic Supervisor: Ho Chi Minh City, December 2013 DECLARATION t to This is to certify that the thesis entitle “Technical efficiency of Vietnam poultry farms: ng non-parametric and parametric approaches”, which is submitted by me in partial hi fulfillment of the requirement for the degree of Master of Art in Development ep Economic to Vietnam – The Netherlands Programme The thesis comprises only my original work and due supervision and acknowledgement have been made in the text to w n all materials used lo ad ju y th Nguyễn Thị Ngọc Linh yi pl n ua al n va ll fu oi m at nh z z ht vb k jm om l.c gm n a Lu n va y te re i ACKNOWLEDGEMENT My appreciation firstly goes to my supervisor, Dr Trƣơng Đăng Thụy, who has made a t to great effort to support me in this thesis His profound comments have been helpful not ng only in completing this study but also in improving my knowledge in doing the hi ep research w I would like to thank my family, especially my mother I would not complete this n lo thesis, as well as study in this program, without their scarification, encouragement and ad important support For the love and expectation of my family, which motivate my y th effort to complete this master degree, my mere expression of gratitude here have ju yi never been sufficient pl al n ua I am very proud to attend this program I am grateful to all lectures in Vietnam – Netherlands Programme for their dedicated instruction and all the courses during the va n period I studied at the program Besides, I would like to thank all the academic and fu ll technical staffs of the Vietnam – Netherlands Programme for supporting me during that oi m time at nh Moreover, I received the enormous encouragement from my classmates and z z workmates, especially my special friend who has supported me a lot in the writing vb ht process I am very grateful for everything that all of you gave me k jm om l.c gm n a Lu n va y te re ii ABBREVIATION t to ng hi ep w n AE Allocative efficiency BCC DEA model as study of Banker, Charnes and Cooper CCR DEA model as study of Charnes, Cooper and Rhodes lo Constant returns to scale ad CRS y th DEA ju Decision making unit pl Deterministic Production Function ua al DPF yi DMU Data Envelopment Analysis Food and Agriculture Organization GSO General Statistic Office ML Maximum likelihood MLE Maximum likelihood estimate OLS Ordinary Least Square PDF Probability density function SFM Stochastic Frontier Model TE Technical efficiency VHLSS Vietnam Household Living Standards Survey VND Vietnam Dong VRS Variable returns to scale n FAO n va ll fu oi m at nh z z ht vb k jm om l.c gm n a Lu n va y te re iii t to ABSTRACT ng hi This study attempts to estimate the technical efficiency as well as determine the ep factorial effects of technical efficiency level of Vietnam poultry farms under semi- industrial system and traditional system Then, this study employs a two-stage analysis w n with a household-level dataset in whole country In particular, the first stage estimates lo ad technical efficiency level of poultry farms under both systems through non-parametric y th and parametric approaches, which were represented by Data Envelopment Analysis and ju Stochastic Frontier Analysis, respectively In the second stage, sources of efficiency yi pl will be determined by Tobit regression and least square regression with household- ua al specific characteristics which represent for human capital in qualitative dimension A n sample of 3,356 households in VHLSS 2010 is utilized to analyze the broiler poultry n va production in Vietnam, wherein 820 poultry farms under semi-industrial system and ll fu 2,536 poultry farms under traditional system The results from the first stage show that m the average technical efficiency which was obtained from SFM is higher than that in oi DEA; and the TE scores in SFA exhibit the variability lower than TE scores in DEA nh at Moreover, from the analysis in the second stage, it is can be stated that education level z of farmer has significantly effects on the TE differential among poultry farms in the z vb positive way Finally, the results also show that TE scores of poultry farms under both ht systems located in the Southeast are higher than other agro-ecological regions jm k Keywords: poultry household, data envelopment analysis, stochastic frontier model, om l.c gm technical efficiency, human capital n a Lu n va y te re iv TABLE OF CONTENTS t to CHAPTER 1: INTRODUCTION ng 1.1 Problem Statements hi ep 1.2 Research Objectives 1.3 Research Organization w CHAPTER 2: LITERATURE REVIEW n lo 2.1 Basic concepts of efficiency ad y th 2.2 Data Envelopment Analysis (DEA) and Stochastic Frontier Analysis (SFA) ju 2.2.1 Data Envelopment Analysis (DEA) 10 yi 2.2.2 Stochastic Frontier Model approach (SFM) 12 pl ua al 2.2.2.1 The Production frontier 12 n i Deterministic Production Frontier 12 va ii Stochastic Production Frontier 13 n fu 2.2.2.2 Estimation method 15 ll m oi i Modified Ordinary Least Squares (MOLS) 15 at nh ii Maximum likelihood Estimation (MLE) 16 z 2.2.2.3 Measurement of Efficiency 17 z vb 2.2.3 Comparison between DEA and SFM approaches 17 ht 2.3 Empirical studies 19 jm k 2.3.1 Measurement of technical efficiency of poultry subsector 19 gm 2.3.2 DEA and SFM approaches on measurement of technical efficiency of om l.c agriculture sector 22 2.3.3 Impact of human capital on agriculture productivity 24 a Lu CHAPTER 3: OVER VIEW OF POULTRY FARMS IN VIETNAM 27 n y te re i Traditional extensive household poultry production (non-intensive system) 31 va 3.2 Poultry production system in Vietnam 29 n 3.1 General characteristics of poultry production in Vietnam 27 ii Semi-industrial commercial poultry production (semi-intensive) 32 iii Industrial poultry production (intensive system) 32 v CHAPTER 4: DATA DESCRIPTIONS AND RESEARCH METHODOLOGY 34 4.1 Data Description 34 t to 4.1.1 Data Source 34 ng 4.1.2 Data Descriptions 34 hi ep 4.2 Method, Model specification and Variables definition 36 4.2.1 The first stage: Measurement of Technical efficiency 36 w n 4.2.1.1 Measurement of Technical efficiency using Data Envelopment Analysis lo 36 ad y th 4.2.1.2 Measurement of Technical efficiency using Stochastic Frontier Model 38 ju i Production function specification 39 yi pl ii Estimation method specification 40 ua al 4.2.1.3 Variables Description for the first stage 41 n 4.2.1.4 Hypothesis testing 44 va n i Functional form specification test 45 fu ll ii Estimating method specification test 45 m oi 4.2.2 The second stage: Factorial decomposition of Technical efficiency 46 nh 4.2.2.1 The Technical efficiency model 46 at z 4.2.2.2 Variables description for the second stage 49 z ht vb 4.2.3 Research Hypotheses 53 jm CHAPTER 5: EMPIRICAL RESULTS AND DISSCUSION 54 k 5.1 The first stage: The estimation of the Technical efficiency scores 54 gm 5.1.1 Testing null hypotheses for SFM approach in the first stage 54 om l.c i The Production Functional form specification test 55 ii The model specification test 57 a Lu 5.1.2 Discussion on results obtained from the first stage 58 n y te re 5.1.2.2 The distribution of technical efficiency scores in SFM and DEA va 58 n 5.1.2.1 Comparing the Technical efficiency scores in SFM and DEA approaches approaches 60 5.1.2.3 Technical efficiency varies between agro-ecological regions 63 vi 5.2 The second stage: The determinants of Technical efficiency 65 5.2.1 Testing the significant of coefficients simultaneously for regressions 65 t to 5.2.2 Discussion on the results obtained from the second stage 66 ng 5.2.2.1 The effects of human capital on technical efficiency scores 67 hi ep 5.2.2.2 The difference of technical efficiency scores between various agro- ecological regions 69 w CHAPTER 6: CONCLUSION AND POLICY IMPLICATION 70 n lo 6.1 Concluding remarks 71 ad y th 6.2 Policy implications 72 ju 6.3 Limitations of study and recommendations for future research 73 yi pl REFERENCES 74 ua al Appendix 1: Matrix of correlation between variables in Stochastic frontier production n function of semi-industrial poultry farms 78 va Appendix 2: Matrix of correlation between variables in Stochastic frontier production n ll fu function of traditional poultry farms 78 oi m Appendix 3: Matrix of correlation between variables in technical efficiency model of at nh semi-industrial poultry farms 79 Appendix 4: Matrix of correlation between variables in technical efficiency model of z z traditional poultry farms 79 vb ht Appendix 5: OLS regression of technical efficiency model of traditional poultry farms jm 80 k gm Appendix 6: Testing heteroskedasticity for OLS regression of technical efficiency Appendix 7: Testing heteroskedasticity for OLS-robust regression of technical om l.c model of traditional poultry farms 80 y vii te re measuring the technical efficiency 84 n Appendix 9: Summary empirical studies of comparison DEA and SFM approaches at va poultry sector 82 n Appendix 8: Summary of Empirical Studies at measuring technical efficiency of a Lu efficiency model of traditional poultry farms 81 LIST OF TABLES t to Table 4-1: Summary statistic of broiler poultry productivity of farms between regions and within systems 35 ng hi ep Table 4-2: Summary statistic of Input and Output variables for Poultry farms under semi-industrial system and traditional system 42 Table 4-3: Statistical description of determinant factors of technical efficiency level 52 w n Table 5-1: Maximum-likelihood estimates of the Cobb-Douglas and Translog stochastic production frontier models 56 lo ad ju y th Table 5-2: Tests hypotheses of the production function specification 58 Table 5-3: Summarizing the technical efficiency scores 59 yi pl Table 5-4: The technical efficiency distribution in SFM and DEA-BCC 61 al n ua Table 5-5: Technical efficiency scores among agro-ecological regions 63 n va Table 5-6: The factorial effects on technical efficiency scores from SFM and DEABCC 66 ll fu oi m nh LIST OF FIGURES at z z ht vb Figure 2-1: Technical efficiency and Allocative Efficiency jm Figure 2-2: Stochastic Production Frontier 14 k Figure 3-1: Growth rate of livestock and poultry with base year of 1990 27 gm l.c Figure 3-2: Annual growth rate of number of poultry with base year of 1990 28 om Figure 3-3: Poultry density of Vietnam in 2006 29 Figure 3-5: Regional Characteristics of poultry-holding household in 2002 30 y viii te re Figure 5-2: Technical efficiency scores between agro-ecological regions 64 n Figure 5-1: The distribution of TE scores of semi-industrial and traditional systems from SFM and DEA approaches 62 va Figure 3-6: Proportion of total chicken in three production systems in 2006 and 2009 in Vietnam 33 n a Lu Figure 3-4: Average number of birds per household in 2001 29