[Journal:] The Central European Review of Economics and Management (CEREM) [ISSN:] 2544-0365 [Volume:] 2 [Issue:] 3 [Year:] 2018 [Pages:] 101-124
Aim: The main objective of this research was to evaluate the efficiency of economic costs in seven units of greenhouse tomato production, during the production cycles of 2016, through the application of the stochastic frontier, depending on the type of packaging they handle and the cost structure that governs them. Design / Research methods: The stochastic frontier model includes the analysis of the non-systematic random component, which assumes an extremely critical role in the analysis during the interpretations. With the calculation of the stochastic cost frontier we construct the cost inefficiency index represented by C_it, delimited below 0. The index shows the percentage in which the cost is exceeded and, therefore, the degree of inefficiency. Conclusions / findings: The elaboration of the stochastic frontier finds its justification in the argument that the less efficient competitor is the one that receives the greater effects of the competition. In this sense, the location of the companies analyzed with respect to their own line of efficiency is essential for the design of the strategies of each company. The production units analyzed showed that, on some occasions, externalities are the cause of inefficiency, but contrary to what is established in theory, there are some units that show that the inefficiency with which they count is diminished by The influence of uncontrolled variables. Originality / value of the article: The contribution of this research lies in the use of efficiency models in the primary sector, specifically in tomato´s greenhouses.
Stochastic Frontier Model Efficiency in Costs tomato´s Greenhouses