Technical efficiency estimates of coffee production in Davao City : a data envelopment approach

Abstract

The Philippine coffee industry is dominated by small-scale farm households. This study was conducted to measure the technical efficiency of coffee production in Davao City using Data Envelopment Analysis. The study also determined the factors that contribute to the technical efficiency of coffee farms using Logistic Regression. Among the 166 respondents obtained, the study revealed that only 11 DMUs are technically efficient operating under constant return to scale. At the same time, 154 and 1 were technically inefficient operating under increasing return to scale and decreasing return to scale. This means that input such as farm size, labor, number of coffee trees, age of coffee trees, fertilizers, and pesticides has to been adjusted to reach the frontier to be technically efficient DMUs. Furthermore, to achieve bias-corrected DEA technical efficiency scores, Bootstrapping was done and later used for regression. Meanwhile, the logistic regression results revealed significant relationships between technical efficiency and socio-economic such as the age of the household head, sex, access to credit, cropping system, technology, and coffee variety. However, the logistic regression also revealed the factors that have no statistically significant relationship in the variables such as education, Farm Experiences, Household Size, Extension Services, and off-farm activities. Keywords: coffee, efficiency, dea, logistic regression, production