ESTIMATION OF WHEAT FLOUR PRODUCTION FUNCTION IN A STOCHASTIC FRONTIER ANALYSIS FOR THE YEAR 2019 BAGHDAD GOVERNORATE CASE STUDY

Abstract

The study aimed to estimate a stochastic frontier production function and the inefficiency function for the production of wheat flour, in addition to estimating the technical efficiency of flour mills in Baghdad Governorate for the year 2019, as a sample of 53 mills was collected. The function was estimated in two periods according to a stochastic frontier method using the frontier 4.1 program. The results showed that the sign of the working hours parameter appeared positive and explained the positivity of the variable on the quantity of flour production in the study sample, and the value of elasticity indicates in the second stage of production stages, but its effect is not significant in the efficiency model. As for the parameter of the variable capital quantities, its sign appeared negative and was at a significant level of 1%. It indicates the presence of waste in the quantity of the input and indicates the value of elasticity in the third stage of production. As for the variable quantities of raw wheat, its parameter sign is positive and below a significant level of 1%. The elasticity value indicates that it is in the first stage of the production stages. As for the inefficiency model, the experience was the only variable that affected the model, the result of which was that the producers with little experience had a significant impact on the inefficiency model at the 10% level. As for estimating the technical efficiency, all sample mills moved away from achieving the optimum size of production. The study recommended the necessity of modernizing milling machines and allocating additional quantities of raw wheat, because the second period witnessed high levels of technical efficiency for sample mills