The methodologies that have been used in existing research to assess the efficiency with which organic farms are operating
are generally based either on the stochastic frontier methodology or on a deterministic non-parametric approach. Recently,
Kumbhakar et al. (J Econom 137:1–27, 2007) proposed a new nonparametric, stochastic method based on the local maximum likelihood
principle. We use this methodology to compare the efficiency ratings of organic and conventional arable crop farms in the
Spanish region of Andalucía. Nonparametrically encompassing the stochastic frontier model is especially useful when comparing
the performance of two groups that are likely to be characterized by different production technologies.
Keywords Organic and conventional farming - Technical efficiency - Local maximum likelihood approach
JEL Classification C14 - Q12 - D24