Fish production environment and thereby the farm performance varies significantly between coastal and non-coastal regions in countries like Bangladesh. This study investigates technical efficiency and other performance indicators differences between farms in coastal and noncoastal regions using data obtained from 121 coastal and 479 noncoastal pond aquaculture farms in Bangladesh. The meta-frontier Data Envelopment Analysis (DEA) and Propensity Score Matching (PSM) have been employed to analyze the data obtained from face-to-face interviews for estimating technical efficiency and other performance indicators differences respectively.
It is seen from the table that the mean meta-technical efficiency score is around 41% when farms from both groups are projected onto a common frontier (pooled frontier) indicating that the outputs can be increased at best by 59% by appropriate management practices, technology, and knowledge. However, the mean technical efficiency is around 61% when coastal farms are projected onto their frontier i.e., frontier formed with observations only from coastal region. Besides, the mean technical efficiency is around 53% when non-coastal producers are projected against their own frontier i.e., frontier formed with observations only from non-coastal region.
On the other hand, the mean meta-frontier technical efficiency is around 49% when coastal farms are projected onto the pooled frontier i.e., the frontier formed with all observations from both coastal and non-coastal regions (Table 3). Besides, the mean meta-frontier technical efficiency is around 39% when non-coastal producers are projected onto the pooled frontier. Therefore, it is evident that coastal farms are technically more efficient than noncoastal farms. The difference is found significant at 1 % level of significance (Kruskal-Wallis rank sum test, Kruskal-Wallis chi-squared = 8.05, df = 1, p-value = 0.0045).
Results show that farms located in coastal regions are more efficient than farms located in non-coastal regions. The average output per farm can be increased by relocating aquaculture farms from non-coastal to coastal regions with the same level of inputs.
The coastal farms are following industry best practice production technology. There are further economic benefits of locating pond aquaculture farms in coastal regions because of cost saving and higher return over investment; and also because of the possibility of reaching breakeven at a lower price and quantity than a non-coastal farm needed.