Measuring capacity utilization in fisheries using physical or economic variables: A data envelope analysis of a Vietnamese purse seine fishery

Data Envelopment Analysis (DEA) studies of fisheries usually apply output oriented capacity utilization based on physical measures. Although physical measures capture important input factors employed in fishing activities (such as boat size, engine power), economic measures directly reflect the cost of inputs employed. This case study investigates whether economic measures are vital or whether capacity efficiency is sufficiently well reflected solely by the use of physical measures. The analysis makes use of a double bootstrap DEA technique and compares input oriented capacity utilization based on physical versus economic measures. The double bootstrap technique was chosen as it allows statistical inference based on the estimated capacity utilization. The results show that economic measures give a lower capacity utilization than that obtained by physical measures. However, no significant difference was found in the capacity utilizations between the two measures. Truncated regression models indicated that factors such as skipper experience and family size did not significantly affect these two measures of capacity utilization at the 5% level. This study concludes that physical variables are capable of capturing the essential economic differences between vessels.