Link Between Livelihoods and Technical Efficiency: Empirical Data from Pond-Based Grouper Aquaculture in Coastal Lamongan, Indonesia

This research studied the role of the fisheries sector, specifically pond-based grouper aquaculture, in coastal Lamongan, Indonesia, which is crucial for coastal food security and economy. Despite relatively high productivity, technical efficiency was not optimal because of its limited livelihood assets, which include human, natural, social, financial, and physical capital. The gap in ownership of these assets has resulted in technical efficiency variations across farmers and has affected both their livelihoods and environmental sustainability. Previous research has mostly focused on capture fisheries or non-grouper species, leaving a critical gap regarding the linkage between livelihood assets and technical efficiency in pond-based grouper aquaculture. This research measured livelihood asset levels, technical efficiency, and the effect of assets on efficiency, using quantitative data from 83 respondents representing the total 105 grouper farming households in coastal Lamongan. Livelihood assets were assessed through scoring and index analysis, technical efficiency was estimated using Stochastic Frontier Analysis (SFA), and the determinants of inefficiency were examined through Tobit regression with robust standard errors. The results found that the average livelihood asset index was 0.47 (moderate), with financial capital being the weakest component. Technical efficiency averaged 0.83, indicating efficient use of inputs while still allowing room for improvement. Natural capital (land area and water resources) and financial capital (income and savings) significantly affected technical inefficiency, whereas human, social, and physical capital did not. These findings emphasize the importance of strengthening the financial capital and the management of natural resources optimally to promote the efficiency and sustainability of grouper aquaculture in coastal Lamongan, Indonesia.