A parametric analysis of eco-efficiency and its determinants: Evidence from Norwegian dairy farms

Abstract

This study aims to estimate eco-efficiency scores and identify determinants of Norwegian dairy farms using a parametric approach that accounts for methane emissions. The study incorporates an environmental output measure and draws on 30 years of panel data from 692 specialist dairy farms (1991–2020). The findings indicate that Norwegian dairy farms are inefficient, with room for improvement in the dairy production system and the environment. According to the average eco-efficiency score, conventional dairy farms could cut input use and CH4 emissions by 5% while maintaining output. Furthermore, the study found that land tenure, experience, and government subsidies all positively impact eco-efficiency. Policymakers should encourage the best-performing dairy farms to share information on increasing productivity while considering environmental concerns to achieve better social and agricultural development. It should be noted that the study only looks at livestock methane emissions; future research may investigate other environmental factors.