Estimating Vessel Efficiency Using a Bootstrapped Data Envelopment Analysis Model

Abstract

Technical efficiency, which measures how well a firm transforms inputs into outputs, gives fishery managers important information concerning the economic status of the fishing fleet and how regulations may be impacting vessel profitability. Data envelopment analysis (DEA), and the stochastic production frontier (SPF) have emerged as preferred methods to estimate efficiency in fisheries. Although each of the approaches has strengths and weaknesses, DEA has often been criticized because it is "deterministic" and fails to account for noise in the data. This paper presents a method for examining the underlying statistical structure of DEA models using bootstrap methods and readily available software. The approach is then applied to a case study of the U.S. mid-Atlantic sea scallop dredge fleet. Results show that the 95% confidence interval for technically efficient output is well above the maximum sustained yield (MSY) level of output.Bootstrap methods, data envelopment analysis, technical efficiency., Research Methods/ Statistical Methods, C44, Q22,