ECONOMIC EFFICIENCY OF CENTRAL AND EAST EUROPEAN FARMS BASED ON DEA - COST APPROACH

The paper addressed an approach on the economic efficiency of farms among ten Central and East European Countries by means of the technical and allocative efficiency, through the DEA-COST method. For the analyze we used two years from the FADN dataset (2013 and 2016): inputs - labor (AWU), land (UAA) and average capital; outputs - total output and farm net income; input prices - rent, wages and depreciation. The main results of our research showed that the average technical efficiencies for the farms sample over the analyzed period are relatively high (around or more than 0.90) and allocative and economic efficiencies are moderate (0.60-0.70) stressing that the farms have similar management practices and technologies but they are not fully cost efficient. In 2016, only farms from Romania and Latvia are completely efficient with respect to all three analyzed efficiency measures, while the most inefficient are the farms from Slovenia. Also, we observed that in the CEE analyzed countries the main cause for cost inefficiency is allocative (inefficient mix of inputs relatively to optimal level).