| Abstract: | China is the world's largest tilapia producer. This study uses the stochastic frontier function in the Cobb–Douglas model to evaluate a production frontier for tilapia aquaculture and analyses the relationship between farm size and production efficiency in China. A random sample of 300 tilapia farmers was surveyed in the main tilapia‐producing areas to study their economic efficiencies. The percentage distribution of tilapia farm technical efficiency was determined, with an average efficiency of 79%, which showed that the sample tilapia farmers operate at 21% below the production frontier and hence that they still have a chance to achieve targeted yields. The technical efficiencies of two categories (≤1 ha and >1 ha) were 78.82% and 79.27% respectively. A second‐stage analysis investigated the relationship between farm size and technical efficiency and showed a positive relationship between farm size and production efficiency based on the ordinary least‐squares model. The optimal farm size was found to be 7.50 ha. This study proposes strategies such as enlarging the farming scale moderately, thereby achieving the advantage of economies of scale, and enhancing the competitiveness of the tilapia industry in China. |
