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Does Managerial Behavior Determine Farm Technical Efficiency? A Case of Grape Production in an Economy in Transition
Author(s) -
ManevskaTasevska Gordana,
Hansson Helena
Publication year - 2011
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.1544
Subject(s) - inefficiency , data envelopment analysis , production (economics) , bounded rationality , economics , nonparametric statistics , rationality , microeconomics , panel data , set (abstract data type) , industrial organization , econometrics , business , computer science , mathematics , statistics , political science , law , programming language
This study explores how farmers' managerial behavior in their production planning processes influences the economic performance of their farms, measured through input‐oriented and output‐oriented technical efficiency. A conceptual framework in which differences in managerial behavior were assumed to be due to bounded rationality was developed. The 3‐year means (2006–2008) from a panel data set on grape‐producing family farms in FYR Macedonia were analyzed. Technical efficiency was estimated with the nonparametric data envelopment analysis approach. The impact of farmers' managerial behavior was assessed in a second‐stage regression. The results suggest that bounded rationality in farmers' production planning decisions causes inefficiency. Copyright © 2011 John Wiley & Sons, Ltd.