Cost efficiency analysis in aquaculture: Data envelopment analysis with a two-stage bootstrapping technique

This study employed data envelopment analysis with a two-stage bootstrapping technique to analyze cost efficiency in aquaculture using the case of intensive white-leg shrimp farming in Phu Yen province, Vietnam. By adopting the bootstrap procedure in the first stage, the bias-corrected point estimate of cost efficiency was 0.604 with the lower limit of 0.541 and the upper limit of 0.687 at the 95% confidence interval. Moreover, allocative inefficiency, implying the inappropriateness of input mixes-given their respective prices-was found to be the primary cause of cost inefficiency in this aquaculture. The result from bootstrap truncated regression in the second stage suggested that lower input levels of chemicals/drugs and fingerlings and higher input levels of feed used per ha may help to increase the cost-efficiency of shrimp farming. Policies for better access to formal credit are very important in improving cost efficiency in this aquaculture.