TECHNICAL EFFICIENCY OF PORTUGUESE WINE FARMS

Abstract

The objective of this study was to measure the levels of technical efficiency of a sample of wine producer farms, belonging to the Portuguese Alentejo region, and to relate these efficiency levels to some characteristics of the farms such as: physical and economic size, farmers’ age, land property, irrigation, labour use, and area and product specialization. The methodology chosen to measure the individual levels of efficiency was non-parametric due to the advantage of not defining a functional form for the production technology. The results show that for vineyard farms there is space for an increase of efficiency levels in input use. The scale and congestion inefficiencies are responsible for most of the observed technical inefficiency. It was verified an increase in technical efficiency when vineyard specialization occurs