Technical Change and Scale Effects in Relation to Profit Efficiency—Case of Family-Based Eggplant Production in Japan

Little is known about how data-driven greenhouse horticulture impacts profit efficiency. Furthermore, the interaction between technical change (e.g., adoption of ECDs) and scale effects (e.g., farmland size) remains underexplored, particularly during periods of high fuel costs. Thus, by investigating the adoption of environmental control devices and farmland size, this study aims to determine whether technical changes (TC) and scale effects (SEs) contribute positively to profit effciency. Therefore, we hypothesize that both factors, TC and SEs, synergistically enhance profit efficiency. For our study, we observed both technical change affecting profit efficiency between 2017 and 2019. However, the technical change effect diminished in recent years, especially since 2020, due to increased input costs. Further, scale effects were rather limited as we observed an inverted U-shaped relationship between profit efficiency and farm size, the optimal farm size being equal and more than 41 and less than 46 are. The input costs negatively impacting the profit efficiency, namely repair and labor hiring costs, should be the foremost urgent issues to be resolved for TC and SEs to take place in the family-based facilitated greenhouse eggplant production in Japan.