Demersal Fishing in Chile : Technical Efficiency and Scale of Operation

This paper estimates technical efficiency in fishing activities of industrial vessels that operated during the 1990-2000 period in the "Merluccius gayi" fishery. Two algorithms -with fixed and random effects- used to estimate stochastic production frontiers are compared. The main results are: (a) There is a high and significant correlation between the effi-ciency rankings obtained with the two algorithms. (b) The fixed effect algorithm generates greater efficiency scores and more disperse efficiency distributions. (c) Both algorithms estimate greater efficiencies for larger boats and boats with more engine power. Smaller boats display greater dispersion in their estimated efficiencies. (d) Consistent estimators in-sinuate the presence of decreasing marginal returns as the fishing effort of the boat increases. (e) This last result is consistent with the evidence of congestion effects, associated to the scale of operation of the total fleet under analysis. (f) The empirical relevance of the Translog functional form is confirmed