Shadow prices and input-oriented production efficiency analysis of the village-level production units of joint forest management (JFM) in India

Joint forest management (JFM) has emerged as the most promising institutional arrangement for sustainable forest management, and village-level organizations (production units) are responsible for all the productive activities of JFM. Employing a parametric linear programming approach, a deterministic input distance function is estimated characterizing the production structure of JFM organizations, in the Gujarat state of India, using the production data from 50 organisations. The distance function includes economic, biological and social outputs, and neo-classical – land, labour, and capital – as well as non-neo-classical – social, political, institutional, and organisational – factors. The results are used to calculate the production efficiency and shadow prices of neo-classical as well as non-neo-classical factors of different village-level JFM organizations. Policy and management implications of production efficiency and shadow prices are discussed.