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Abstract
What are the most salient features of the Mexican sugar agroindustry's relative technical
efficiency? This paper looks at a very preliminary approach to the relative technical efficiency
(RTE) conditions prevailing in the sugar refineries of the country, with the support of an
empirical production function. With this goal in mind, an RTE examination of the national
sugar refineries is undertaken based upon data envelopment analysis (DEA), a non-parametric
mathematical programming technique that allows for the RTE coefficients estimation for the
decision making units (DMU) taken into account. The stance considered deals with an input
oriented approach and the RTE indices are generated by a variable returns to scale (VRE)
technology.
The sample used deals with 57 DMU's and, in order to fulfill a highly discriminatory power of
the model, four inputs and two outputs are employed. The basic model has a DEA-BCC
structure, whose inputs are the industrialized area, the net ground sugar cane, the sugar harvest
span, and the production costs. The outputs accounted for are total sugar produced and net
benefits.
Approximately, one fifth of DMUs are technically efficient, according to the final results. Such
a conclusion allows for the setout of economic policies aimed at straightforwardly improving
the RTE of inefficiency DMU's by means of an economic policy allowing for an optimum
allocation of resources.