1 Section for Production, Markets and Policy, Department of Food and Resource Economics, Faculty of Science, Københavns Universitet2 Lithuanian Institute of Agrarian Economics3 Section for Production, Markets and Policy, Department of Food and Resource Economics, Faculty of Science, Københavns Universitet
In this paper we develop a fuzzy version of the crisp Free Disposal Hull (FDH) method for measuring technical efficiency for samples of similar production units. The FDH-method is basically Data Envelopment Analysis (DEA) without the underlying assumption of convexity of the technology set. Our approach builds directly upon the definition of Farrell's indexes of technical efficiency used in crisp FDH. Therefore we do not require the use of fuzzy programming techniques but only utilize ranking probabilities of intervals as well as a related definition of dominance between pairs of intervals. We illustrate the approach using a data set of 200 Lithuanian family farms for the period of 2004–2009.