DEA-Bilateral Performance Comparison: an Application to Japan Agricultural Co-operatives (Nokyo)

Abstract

This article is concerned with an empirical approach for bilateral performance comparison of Japan agriculture (JA) co-operatives, using data envelopment analysis (DEA). In this study, three new indexes (comparative production index, comparative cost index, and comparative cost reduction ratio) are proposed to measure comparative advantages in terms of production and cost analyses. The concept of returns to scale is also discussed for both production and cost analyses. This bilateral performance comparison discusses a current management problem of JA. It is hoped that our empirical findings can serve as a policy-making basis for reorganizing Japanese agriculture in the coming 21st century.