Technical Efficiency of the Longline Fishery in Hawaii: An Application of a Stochastic Production Frontier

Abstract

This paper examines the level and determinants of technical efficiency for a sample of domestic longline fishing vessels operating in Hawaii in 1993. The data on per-trip costs and revenues, fishing targets, vessel ownership, experience and education level of fishermen, vessel size, and vessel age are analyzed using a translog stochastic production frontier, including a model for vessel-specific technical inefficiencies. Output elasticities, marginal productivities of inputs, and returns to scale are also examined. The technical inefficiency effects are found to be highly significant in explaining the levels of and variation in vessel revenues. The mean technical efficiency for the sample vessels is estimated to be 84%. Vessels that target swordfish, and those varying target by season, set, or trip, tend to be less efficient than those vessels targeting tuna and those mixing targets in all trips. Owner-operated vessels seem to be more efficient than those operated by hired captains. The experience of fishermen has a strong positive influence on technical efficiency. Although insignificant, vessel size and fishermen's education level have a positive influence, and vessel age has a negative influence on vessel efficiency.