Efficiency of Egyptian organic agriculture: A local maximum likelihood approach

Productive efficiency analysis is a relevant tool that can be used to evaluate differences in the performance between conventional and organic farms. Such study is important for the assessment of the economic viability of these two agricultural systems. Although the existing research has widely used the stochastic frontier methodology and the data envelopment analysis nonparametric approach to assess farming performance, the use of the local maximum likelihood (LML) approach proposed by Kumbhakar et al. is scarce. This study represents the first analysis that compares the efficiency levels of organic and conventional farms in Egypt. To do so, we apply LML methods to cross-sectional, farm-level data collected from a sample of 60 Egyptian farms. Results suggest that performance of organic farmers is slightly better than performance of their conventional counterparts. Further, we find a positive relationship between technical efficiency and farm size. [EconLit citations: C14, Q12, D24].