Skip to main content
SpringerLink
Log in

Multi-output Technical Efficiency in the Olive Oil Industry and Its Relation to the Form of Business Organisation

  • Chapter
  • First Online:
Efficiency Measures in the Agricultural Sector

Abstract

This work studies the level of technical efficiency in the Andalusian oil industry from a multi-output, non-parametric approach by conducting the data envelopment analysis (DEA) methodology with non-radial distance functions, as well as implementing environmental and non-discretionary variables. The production frontier includes three outputs: quantity and quality of oil production, the outputs to be maximised, and one output to be minimised, the environmental impact of the production process. The inputs are the following: grinded olive, labour, and capital (both fixed and floating). The analysis is carried out by including non-discretionary variables from two points of view. It is considered that the business structure (cooperative or corporation) of the firm affects the frontier (technology). This variable is included through a specific three-stage method. The relation between efficiency and other non-discretionary variables is analysed by the estimation of a Tobit model. Having a sample of 88 oil-mill industries in Andalusia as the starting point, the indices for the two nonconventional outputs in this type of analysis are elaborated; quality is quantified by means of an aggregated index that gathers some aspects related to the separation of olives, critical points, and traceability. The environmental impact is assessed by another index that includes the effects produced on soil, water, air, and sound comfort. From the analysis of results, it can be underlined that, in spite of the fact that the levels of efficiency are high on average, some production adjustments to reduce inputs and the environmental impact of the process could be implemented. The influence of the business structure is significant, and results show that corporations are the most effective ones.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 84.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 109.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 109.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Notes

  1. 1.

    Actually CCR and BCC models cannot be applied in this case. The direction to the frontier of desirable outputs must differ from that of undesirable outputs.

  2. 2.

    “The concept of joint production captures essential physical aspects of production. To this end, we want to link the economic concept of joint production to the laws of thermodynamics, and in particular the Entropy Law”, p. 132.

  3. 3.

    The proposal to treat undesirable outputs as inputs by DEA can lead to undesirable outputs without desirable outputs, (Zhu 2009), violating the null jointness assumption. This treatment is compiled by using appropriate mathematical programming techniques in the context of DEA models without outputs (Lovell and Pastor 1995).

  4. 4.

    It is possible to go deeper in the concepts of returns to scale in Cooper et al. (2004), Chapter 2, p. 41.

  5. 5.

    Expression (12.11) is not linear because of the second set of restrictions, but it is easily computable in non-linear programming. All these models were specified in MATLAB using the non-linear optimiser “fmincon” – find minimum of a constrained non-linear multivariate function.

References

  • Abdourahmane T, Bravo-Ureta B, Rivas T (2001) Technical efficiency in developing country agriculture: a meta-analysis. Agric Econ 25:235–243

    Article  Google Scholar 

  • Ali AI, Seiford LM (1993) The mathematical programming approach to efficiency analysis. In: Fried HO, Lovell CAK, Schmidt SS (eds) The measurement of productive efficiency: techniques and applications. Oxford University Press, Oxford

    Google Scholar 

  • Almansa C, Martinez-Paz JM (2011) Intergenerational equity and dual discounting. Environ Dev Econ 16(6):685–707

    Article  Google Scholar 

  • Alonso M, García J (2009) Cooperatives versus corporate in the Spanish agricultural sector: non-parametric estimation of technical efficiency. Anales de estudios económicos y empresariales 19:61–90

    Google Scholar 

  • Álvarez A (ed) (2001) La medición de la eficiencia y la productividad. Pirámide, Madrid

    Google Scholar 

  • Amores A, Contreras I (2009) New approach for the assignment of new European agricultural subsidies using scores from data envelopment analysis: application to olive-growing farms in Andalusia (Spain). Eur J Oper Res 193(3):718–729

    Article  Google Scholar 

  • Ball VE, Lovell CAK, Nehring R, Somwaru A (1994) Incorporating undesirable outputs into models of production: an application to US agriculture. Cahiers d’Economie et Sociologie Rurales 31:60–74

    Google Scholar 

  • Ball VE, Lovell CAK, Luu H, Nehring R (2004) Incorporating environmental impacts in the measurement of agricultural productivity growth. J Agric Resour Econ 29:436–460

    Google Scholar 

  • Banker RD, Morey RC (1986) Efficiency analysis for exogenously fixed input and outputs. Oper Res 34(4):513–521

    Article  Google Scholar 

  • Barnes A (2006) Does multi-functionality affect technical efficiency? A non-parametric analysis of the Scottish dairy farms. J Environ Manage 80(3):287–294

    Article  CAS  Google Scholar 

  • Barreiro J, Martínez-Paz J, Espinosa-Goded M (2009) Impact of agri-environmental scheme participation on dry-land cereal farms’ efficiency. ITEA: Información Técnica Económica Agraria 105(3):184–201

    Google Scholar 

  • Bartlett W, Cable J, Estrin S, Jones DC, Smith SC (1992) Labor-managed cooperatives and private firms in North Central Italy: an empirical comparison. Ind Labor Relat Rev 46(1):103–118

    Article  Google Scholar 

  • Battese E (1992) Frontier production functions and technical efficiency: a survey of empirical applications in agricultural economics. Agric Econ 7:185–208

    Article  Google Scholar 

  • Baumgärtner S (2004) Price ambivalence of secondary resources: joint production, limits to substitution, and costly disposal. Resour Conserv Recycl 43:95–117

    Article  Google Scholar 

  • Bonin JP, Jones DC, Puttermann L (1993) Theoretical and empirical studies of producer cooperatives: will ever the twain meet? J Econ Lit 31(4):1290–1320

    Google Scholar 

  • Brada J, Méndez J (2009) Technology, effort and the efficiency of production: labor-managed versus capitalist firms. South-East Eur J Econ 1:35–53

    Google Scholar 

  • Bravo-Ureta B, Pinheiro A (1993) Efficiency analysis of developing country agriculture: a review of the frontier function literature. Agric Resour Econ Rev 22(1):88–101

    Google Scholar 

  • Bravo-Ureta B, Solís D, Moreira-López V, Maripani J, Thiam A, Rivas T (2007) Technical efficiency in farming: a meta-regression analysis. J Prod Anal 27(1):57–72

    Article  Google Scholar 

  • Charnes A, Cooper W, Rhodes E (1981) Evaluating program and managerial efficiency: an application of data envelopment analysis to program follow through. Manage Sci 27(6):668–697

    Article  Google Scholar 

  • Cook ML (1995) The future of agricultural cooperatives: a neo-institutional approach. Am J Agric Econ 77(5):1153–1159

    Article  Google Scholar 

  • Cooper WW, Seiford LM, Zhu J (2004) Handbook on data envelopment analysis. Springer, Boston

    Book  Google Scholar 

  • Damas E, Romero C (1997) Análisis no paramétrico de la eficiencia relativa de las almazaras cooperativas en la Provincia de Jaén durante el período 1975–1993. Revista Española de Economía Agraría 180:279–304

    Google Scholar 

  • Daraio C, Simar L (2005) Introducing environmental variables in nonparametric frontier models: a probabilistic approach. J Prod Anal 24(1):93–121

    Article  Google Scholar 

  • Dios-Palomares R, Martínez-Paz JM (2011) Technical, quality and environmental efficiency of the olive oil industry. Food Policy 36(4):526–534

    Article  Google Scholar 

  • Dios-Palomares R, Martínez-Paz JM, De Haro-Jiménez T (2005) Accounting for technical, quality and environmental efficiency in the olive oil industry. Paper presented at the ninth European workshop on efficiency and productivity analysis, Brussels, Belgium

    Google Scholar 

  • Dios-Palomares R, Martínez-Paz JM, Martínez-Carrasco F (2006) El análisis de eficiencia con variables de entorno: un método de programas con tres etapas. Estudios de Economía Aplicada 24:1–23

    Google Scholar 

  • Faber M, Props J, Baumgärtner S (1998) All production is joint production –a thermodynamic analysis. In: Faucheax S, Gowdy J, Nicolaï I (eds) Sustainable and firms: technological change and the changing regulatory environment. Edwars Elgar, Cheltenham, pp 131–158

    Google Scholar 

  • Färe R, Grosskopf S (2004) Modeling undesirable factors in efficiency evaluation: comment, European. J Oper Res 157:242–245

    Article  Google Scholar 

  • Färe R, Grosskopf S, Lovell CAK (1985) The measurement of efficiency of production. Kluwer-Nijhoff, Boston

    Google Scholar 

  • Färe R, Grosskopf S, Lovell CAK, Pasurka C (1989) Multilateral productivity comparisons when some outputs are undesirable: a non-parametric approach. Rev Econ Stat 75:90–98

    Article  Google Scholar 

  • Färe R, Grosskopf S, Lovell C (1994) Production frontiers. Cambridge University Press, Cambridge

    Google Scholar 

  • Färe R, Grosskopf S, Noh D, Weber W (2005) Characteristics of a polluting technology: theory and practice. J Econom 126:469–492

    Article  Google Scholar 

  • Ferrier GD, Porter PK (1991) The productive efficiency of US milk processing cooperatives. J Agric Econ 42:161–173

    Article  Google Scholar 

  • Freese J, Scott J (2006) Regression models for categorical dependent variables using stata. Stata Press, College Station

    Google Scholar 

  • Fried H, Schmidt SS, Yaisawarng S (1999) Incorporating the operating environment into a nonparametric measure of technical efficiency. J Prod Anal 12(3):249–267

    Article  Google Scholar 

  • Fried H, Lovell C, Schmidt SS, Yaisawarng S (2002) Accounting for environmental effects and statistical noise in data envelopment analysis. J Prod Anal 17:157–174

    Article  Google Scholar 

  • Gázquez J, Sánchez M (2009) Factors influencing olive oil brand choice in Spain: an empirical analysis using scanner data. Agribusiness 25(1):36–55

    Article  Google Scholar 

  • Giannakas K, Tran K, Tzouvelekas V (2000) Efficiency, technological change and output growth in Greek olive growing farms: a Box-Cox approach. Appl Econ 32:909–916

    Article  Google Scholar 

  • Hailu H, Veeman V (2001) Non-parametric productivity analysis with undesirable outputs: an application to the Canadian pulp and paper industry. Am J Agric Econ 83:605–616

    Article  Google Scholar 

  • Hart O, Moore J (1990) Property rights and nature of the firm. J Polit Econ 98(6):1119–1158

    Article  Google Scholar 

  • Hernández-Sancho F, Picazo-Tadeo A, Reig-Martinez E (2000) Efficiency and environmental regulation. Environ Resour Econ 15:365–378

    Article  Google Scholar 

  • Hofler RA, Payne JE (1993) Efficiency in social versus private agricultural production: the case of Yugoslavia. Rev Econ Stat 73:153–157

    Article  Google Scholar 

  • Jensen MC, Meckling WH (1979) Rights and production function: an application to labor-managed firms and codetermination. J Bus 52(4):469–506

    Article  Google Scholar 

  • Jones D (2007) The productive efficiency of Italian producer cooperatives: evidence from conventional and cooperative firms, in Sonja Novkovic. In: Sena V (ed) Cooperative firms in global markets, vol 10, Advances in the economic analysis of participatory & labor-managed firms. Emerald Group Publishing Limited, London, pp 3–28

    Chapter  Google Scholar 

  • Karagiannis G, Tzouvelekas V (2009) Measuring technical efficiency in the stochastic varying coefficient frontier model. Agric Econ 40:389–396

    Article  Google Scholar 

  • Karagiannis G, Kien C, Tzouvelekas V (2003) On the choice of functional form in stochastic frontier modelling. Empir Econ 28(1):75–100

    Article  Google Scholar 

  • Lambarraa F, Serra T, Gil J (2007) Technical efficiency analysis and decomposition of productivity growth of Spanish olive farms. Span J Agric Res 5(3):259–270

    Google Scholar 

  • Lambarraa F, Stefanou S, Gil J (2009) The analysis of long-run technical inefficiency in Spanish olive Sector. Paper presented at the IV Congreso de Eficiencia y Productividad, Córdoba, Spain

    Google Scholar 

  • Lovell CAK, Pastor J (1995) Units invariant and translation invariant DEA models. Oper Res Lett 18:147–151

    Article  Google Scholar 

  • Lozano-Vivas A, Pastor JT, Pastor JM (2002) An efficiency comparison of European banking systems operating under different environmental conditions. J Prod Anal 18:59–77

    Article  Google Scholar 

  • Maietta O, Sena V (2008) Is competition really bad news for cooperatives? Some empirical evidence for Italian producers’ cooperatives. J Prod Anal 29(3):221–233

    Article  Google Scholar 

  • Mesias FJ, Martinez-Carrasco F, Martinez-Paz JM, Gaspar P (2011) Functional and organic eggs as an alternative to conventional production: a conjoint analysis of consumers’ preferences. J Sci Food Agric 91(3):532–538

    Article  CAS  Google Scholar 

  • Mili S (2009) Market dynamics and policy reforms in the olive oil sector: a European perspective. In: Noronha MT, Nijkamp P, Rastoin JL (eds) Traditional food production facing sustainability: a European challenge. Ashgate Publishing, Hampshire

    Google Scholar 

  • Millán J (1986) Eficiencia, dimensión y crecimiento de las cooperativas olivareras de Jaén. Ph. dissertation, E.T.S.I.A.M, Universidad de Córdoba

    Google Scholar 

  • Muñiz MA (2001) ¿Son realmente menos eficientes los centros LOGSE? (La evaluación DEA de los Institutos de Educación Secundaria). Hacienda Pública Española 157:169–196

    Google Scholar 

  • Oustapassidis K, Vlachvei A, Karantininis K (1998) Growth of investor owned and cooperatives firms in Greek dairy industry. Ann Public Co-op Econ 69:399–417

    Article  Google Scholar 

  • Picazo-Tadeo A, Prior D (2009) Environmental externalities and efficiency measurement. J Environ Manage 90(11):3332–3339

    Article  Google Scholar 

  • Piesse J, Thirtle C, Turk J (1996) Efficiency and ownership in Slovene dairying: a comparison of econometric and programming technique. J Comp Econ 22(1):1–22

    Article  Google Scholar 

  • Prieto A, Zofío JL (2004) Modelización de la gestión ambiental preventiva mediante estándares. Investigaciones económicas 28:43–66

    Google Scholar 

  • Rallo L (2010) El olivar en un tiempo de cambio. Citoliva, Sevilla

    Google Scholar 

  • Rikkonen P (2005) Scenarios for future agriculture in Finland: a Delphi study among agri-food sector stakeholders. Agric Food Sci 14(3):205–223

    Article  Google Scholar 

  • Salazar T, Galve C (2008) Cooperativa vs. Capitalista: Afecta la forma de gobierno a la eficiencia productiva? Revista Europea de Dirección y Economía de la Empresa 17:133–144

    Google Scholar 

  • Sánchez J, Gallego V, Araque E (2011) El olivar andaluz y sus transformaciones recientes. Estudios Geográficos 270:203–229

    Article  Google Scholar 

  • Schmitt G (1993) Why is the agriculture of advanced western countries still organized by family farms? Will this continue to be so in the future? Eur Rev Agric Econ 18(3):443–458

    Article  Google Scholar 

  • Seiford LM, Zhu J (2002) Modeling undesirable factors in efficiency evaluation. Eur J Oper Res 142:16–20

    Article  Google Scholar 

  • Simar L, Wilson P (2007) Estimation and inference in two-stage, semi-parametric models of production processes. J Econom 136(11):31–64

    Article  Google Scholar 

  • Soboh R, Oude A, Giesen G, Van Dijk G (2009) Performance measurement of the agricultural marketing cooperative: the gap between theory and practice. Rev Agric Econ 31:446–469

    Article  Google Scholar 

  • Tzouvelekas V, Pantzios C, Fotopoulos C (2001) Technical efficiency of alternative farming systems: the case of Greek organic and conventional olive-growing farms. Food Policy 26(6):549–569

    Article  Google Scholar 

  • Zaim O (2004) Measuring environmental performance of state manufacturing through changes in pollution intensities: a DEA framework. Ecol Econ 48:37–47

    Article  Google Scholar 

  • Zaim O, Taskin F (2000) A Kuznets curve in environmental efficiency: an application on OECD countries. Environ Resour Econ 17:21–36

    Article  Google Scholar 

  • Zhou P, Poh KL, Ang B (2007) A non-radial DEA approach to measuring environmental performance. Eur J Oper Res 178:1–9

    Article  Google Scholar 

  • Zhu J (2009) Modeling undesirable measures. In: Zhu J (ed) Quantitative models for performance evaluation and benchmarking. Springer, New York, pp 97–107

    Chapter  Google Scholar 

  • Zofío JL, Prieto A (2001) Environmental efficiency and regulatory standards: the case of CO2 emissions from OECD industries. Resour Energy Econ 23:63–86

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. University of Córdoba, Campus de Rabanales, Córdoba, Spain

    Rafaela Dios-Palomares

  2. University of Murcia, Campus Espinardo, Murcia, Spain

    José M. Martínez-Paz

  3. IRNASA. CSIC, Salamanca, Spain

    Angel Prieto

Authors
  1. Rafaela Dios-Palomares
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. José M. Martínez-Paz
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Angel Prieto
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Rafaela Dios-Palomares .

Editor information

Editors and Affiliations

  1. , Mathematics, Azores University, Mãe de Deus, Ponta Delgada, 9501-801, Portugal

    Armando B. Mendes

  2. , Agricultural Sciences Department, University of Azores, Rua Capitão João de Ávila, Angra do Heroísmo, 9700-042, Portugal

    Emiliana L. D. G. Soares da Silva

  3. , Mathematics, Escola de Ciências e Tecnologia, R. Romão Ramalho 59, Évora, 7000-671, Portugal

    Jorge M Azevedo Santos

Rights and permissions

Reprints and permissions

Copyright information

© 2013 Springer Science+Business Media Dordrecht

About this chapter

Cite this chapter

Dios-Palomares, R., Martínez-Paz, J.M., Prieto, A. (2013). Multi-output Technical Efficiency in the Olive Oil Industry and Its Relation to the Form of Business Organisation. In: Mendes, A., L. D. G. Soares da Silva, E., Azevedo Santos, J. (eds) Efficiency Measures in the Agricultural Sector. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-5739-4_12

Download citation

Publish with us

Policies and ethics

Search

Navigation