Measuring technical efficiency of potato production in Iran using robust data envelopment analysis

A non-parametric method of data envelopment analysis (DEA) was applied to analyze the technical and scale efficiency of potato production in 23 Iranian provinces. In many real applications, inputs and outputs may be imprecise. In the present study, a robust DEA (RDEA) optimization framework was used to concentrate on DEA with uncertain data. The method was based on six inputs (human labor rent, land rent, diesel and machinery rent, irrigation water cost, fertilizer cost, pesticide cost) and the single output of potato gross return. The proposed DEA for 23 Iranian potato-producing provinces reveals that the average technical efficiency is 90% and scale efficiency is 97%. This suggests that inefficient provinces can potentially reduce their overall costs for potato production. A Monte Carlo simulation was used to compute the conformity of the rankings from the RDEA model with reality to illustrate the importance of varying the level of efficiency for different levels of conservatism.