Technical Efficiency and Social Capital in Tilapia Aquaculture Production in Nueva Vizcaya, Philippines

This paper focuses on tilapia aquaculture production in Nueva Vizcaya, Philippines. Primary data were collected from a field survey. Apart from investigating the effects of technical efficiency variables (e.g., operator’s experience, age of fishpond owner, and frequency of visits of the manager) on the production frontier, this study also incorporated social capital variables (e.g., social network and trust) as additional factors affecting the frontier. A cross-sectional analysis of 202 fishpond operators from the 10 municipalities in the province was conducted using stochastic frontier analysis, where the error component consists of both the usual two-side random shocks and the one-side technical inefficiency shocks. Results suggest that social network has an indirect but significant relationship to aquaculture harvest. On the other hand, harvest is significantly influenced by community trustworthiness, which implies that fish farmers who do not readily lend money to members of their community are able to increase their harvest because they can devote their funds to production activities.