# Evaluation of the operational efficiency and policy innovation of chinese happy farmhouse: From the perspective of business entities

## TL;DR

This study evaluates the efficiency of Chinese Happy Farmhouse tourism and finds that company clusters perform best, offering insights for rural development and policy.

## Contribution

The paper introduces a three-stage DEA model to assess operational efficiency across different business entity models in rural tourism.

## Key findings

- Company clusters showed the highest operational efficiency, followed by farmer participation and individual farmers.
- Efficiency disparities are mainly due to differences in scale efficiency and talent supply.
- Policy recommendations include talent recruitment and cluster-based management for sustainable rural development.

## Abstract

The development of Happy Farmhouse tourism in China faces significant challenges of homogenized competition and low operational efficiency. This study aims to evaluate the operational efficiency of these farmhouses and compare the performance across three distinct business entity models: individual farmer, farmer participation, and company cluster. To this end, the study employs a three-stage Data Envelopment Analysis (DEA) model on panel data (2014–2023) from 50 farmhouses in Huzhou, China, to measure technical, scale, and managerial efficiency. Results reveal steady improvements in overall performance but significant efficiency disparities, with company clusters demonstrating the highest efficiency, followed by farmer participation models, and individual farmers demonstrating the lowest. The primary reasons for this disparity are identified as differences in scale efficiency and talent supply. Consequently, our findings provide actionable insights for optimizing rural tourism’s role in sustainable development and rural revitalization, with policy recommendations emphasizing talent recruitment, cluster-based management, and targeted support for different business models.