MEASURING ECONOMIC AND SOCIAL EFFICIENCIES OF AREA FARMERS ORGANIZATION IN MALAYSIA
Publication Date : 01/07/2015
To fulfll highly expectations of the government and to retain continuous supports from the members, Area Farmers Organization (AFOs) is anticipated to be an effcient organization. Hence, one way to measure the ability of an organization is through effciency measurement. Therefore, this paper examines the technical effciency (TE) of AFOs and determinant factors of effciency; from 2006 to 2010. The effciency is measured through three different dimensions namely as economic, social and socio-economic. For the purpose of the study, a two stage Data Envelopment Analysis (DEA) is used. In the frst stage, DEA applied to measure the effciency score of 56 AFOs. In the second stage, the effciency score obtained and regressed by using Tobit model. Based on previous study, determinant factors such as assets, location, year of operation, types of business, manager’s education, size of business and size of membership serve as independent variables. The effciency analysis in the study reveals most of the AFOs are plagued with ineffciency. The average technical effciency scores recorded at 0.708, 0.672 and 0.790 under economic, social and socio-economic dimensions respectively. As for determinant factors, the variables liked location, age of operation, size of business and membership are found to have a positive relationship with effciency level.
Key words: Technical Effciency, Area Farmers Organization (AFOs)
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