AN APPLICATION OF MULTI‐CRITERIA DECISION MAKING INCORPORATING STOCHASTIC PRODUCTION FRONTIERS: A CASE STUDY OF ORGANIC COFFEE PRODUCTION IN KONA,HAWAII |
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| Authors: | TADAYOSHI MASUDA JOHN F YANAGIDA JAMES E T MONCUR SAMIR A EL‐SWAIFY |
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| Institution: | 1. National Soybean Research Laboratory University of Illinois at Urbana‐Champaign 1101 West Peabody Drive, Urbana, IL 61801 E‐mail: tmasuda@illinois.edu;2. Department of Natural Resources and Environmental Management University of Hawaii at Manoa, 1910 East‐West Road Sherman Laboratory 101, Honolulu, HI 96822;3. Department of Economics University of Hawaii at Manoa 2424 Maile Way, Saunders Hall, Honolulu, HI 96822 |
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| Abstract: | Abstract In this paper, we develop a land use allocation model to search for the optimal ratio of organic (nonchemical) and conventional (chemical‐use) farming acreage. The idea is to incorporate stochastic production frontiers (SPFs) to a multi‐criteria decision making (MCDM) model as technological constraints. The objectives of this model are to maximize net returns, minimize chemical inputs, and optimize organic inputs given environmental and ecological concerns. The compromise solutions suggest the desirable ratio of organic and conventional farming acreage and targetable operations for each farming system to improve regional welfare. This method was applied to the Kona coffee belt, Hawaii, and the analysis determined the optimal proportion of organic and conventional Kona coffee farming fields as 0.265 to 0.735 in terms of optimizing community benefits or regional welfare. |
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| Keywords: | Organic farming multi‐criteria decision making (MCDM) stochastic production frontier (SPF) technological constraint environmental externality regional welfare Kona coffee belt Hawaii |
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