Ed technical efficiency indicates of continuous returns to scale (Figure two). The PP’ production possibility output.represents the upper bound with the production tionally reduce without the need of changing the curve Although the output-orientated technical efficiency possibilities, at point D of howthe firm is technically inefficient since it is beneath without the need of answers the question where substantially the output is often proportionally elevated the PP’ curve. The the volume of D to E[16,17]. Suppose that inefficiency,one 2-Acetyl-4-tetrahydroxybutyl imidazole Autophagy particular input the amount of altering distance from input represents technical a firm utilizes that is (X) to generate the output that1 could 2be extended with no escalating the inputs. Hence, the2). The two outputs (Q and Q) under the assumption of continuous returns to scale (Figure ratio measuring the output-oriented technical efficiency is given: from the production possibilities, PP’ production possibility curve represents the upper bound at point D where the firm is technically inefficient since it is beneath the PP’ curve. The TE = OD/OE (four) distance from D to E represents technical inefficiency, that is the amount of the output Fishes 2021, 6, x FOR PEER Review thatThe income efficiency (RE) might be defined for any observed output value represented five of 13 could possibly be extended with no rising the inputs. Therefore, the ratio measuring the by the RR’ line. Suppose the practical output with the given firm is represented at point D. output-oriented technical efficiency is given: In that case, point E represents the technically effective production plus the revenue TE = OD/OE (four) efficiency associated with point E’, then the income efficiency is measured as follows:RE = OD/OF(5)If we’ve price tag details, then we are able to draw the isorevenue line DD’; the allocative efficiency is measured by: AE = OE/OF (six)Figure two. Technical and allocative efficiency from an output orientation. Figure two. Technical and allocative efficiency from an output orientation.The revenue efficiency (RE) is often defined for any observed output price tag represented 2.three. Analytical Framework by the RR’ line. Suppose the practical output on the provided firm is represented at point D. Inside the process widely utilised within the SF 11 site literature to estimate technical efficiency is an econometric approach [18]. It aims to create stochastic frontier models determined by the deterministic parameter frontier of Aigner et al. [19]. Because shrimp production is an example of single output and multiple-input production, this study focuses around the use of an econometric strategy for measuring technical efficiency depending on the production frontier model in Cobb ouglas function kind, which was normally applied to estimateFishes 2021, 6,five ofthat case, point E represents the technically effective production and the income efficiency connected with point E’, then the income efficiency is measured as follows: RE = OD/OF (five)If we’ve got value information, then we are able to draw the isorevenue line DD’; the allocative efficiency is measured by: AE = OE/OF (6) 2.three. Analytical Framework The strategy widely applied within the literature to estimate technical efficiency is definitely an econometric approach [18]. It aims to create stochastic frontier models determined by the deterministic parameter frontier of Aigner et al. [19]. Considering that shrimp production is definitely an example of single output and multiple-input production, this study focuses on the use of an econometric method for measuring technical efficiency determined by the production frontier model in Cobb ouglas function type, which was.