The extent of resource use inefficiencies in cotton production in Pakistan's Punjab: an application of Data Envelopment Analysis

This paper attempts to identify sources of resource use inefficiency for co tton production in Pakistan's Punjab. The use of a non-parametric method, D ata Envelopment Analysis (DEA), is developed to study the relative technica l and allocative efficiencies of individual farms which use similar inputs, produce the same product and operate under comparable circumstances. In th e 'cotton-wheat' system of Pakistan, there are a considerable number of far ms that are both technically and allocatively inefficient. The use of DEA s hows that the technique provides a clear identification of both the extent and the sources of technical and allocative inefficiencies in cotton produc tion. However, both the interpretation of the farm level results generated and the projection of these results to a higher level require care, given t he technical nature of the agricultural production processes. (C) 2000 Else vier Science B.V. All rights reserved.