Allocative Efficiency Indices Research Articles

Analysis of Resource Use Efficiency and Profitability of maize seed production in the Rolpa district of Nepal

This study aimed to assess the profitability and resource use efficiency of maize seed production in the Rolpa district of Nepal. Primary data were collected from a sample of 67 maize-growing farmers involved in maize seed production, selected randomly from the sampling frame with a confidence level of 95% and a margin of error of 5%, using Raosoft. Additionally, secondary information was obtained through a review of relevant literature. Descriptive statistics and the Cobb-Douglas production function were employed for data analysis. The results indicated that maize seed production in the study area was profitable, as evidenced by a gross margin of 17,160.6 NRs./ha and a benefit-cost ratio of 1.12. The productivity level was estimated at 15.46 qtl/ha. Moreover, the return to scale of maize seed production was calculated to be 0.79, suggesting a decreasing return to scale. The analysis of allocative efficiency indices highlighted the need for optimizing resource allocation. Specifically, increasing costs on seed, chemical fertilizers, and management by 94.03%, 99.30%, and 60.25% respectively would lead to optimal resource allocation. Conversely, costs related to human labor, farmyard manure (FYM), and tillage should be reduced. This research contributes to a better understanding of the profitability and resource utilization in maize seed production in the Rolpa district of Nepal. The findings provide valuable insights for farmers and policymakers to make informed decisions regarding resource allocation and enhance the overall efficiency and sustainability of maize seed production in the region.

Efficiency of Resource Use in Rainfed Maize Production System by Small-Scale Farmers in Central Agricultural Zone of Cross River State, Nigeria

The study determined resource use efficiency in maize crop production by small-scale farmers in the Central Agricultural Zone of Cross River State Nigeria. It specifically examined the allocative efficiency of resources used by small-scale farmers in rainfed maize production in the area. Primary data were used to conduct the study. Statistical tools employed were multiple regression analysis and allocative efficiency index (AEI). The results of the multiple regression analysis revealed that the variables of farm size (x1), farm capital (x3), fertilizer (x4), farm credit (x6), extension service (x7), seeds planted (x8) had a positive relationship with the output of maize. The allocative efficiency index (AEI) of the various productive resources showed that farm size (x1), fertilizer (x3), and herbicides (x5) were found to be underutilized since their allocative efficiency index (AEI) was greater than one (1) and their marginal value product (MVP) were greater than their marginal factor cost (MFC) while Labour(x2) was over-utilized as the allocative efficiency index (AEI) was less than one (1). Based on these findings, the following recommendations were made; maize farmers should improve their use of productive resources such as land, capital, fertilizers, herbicide and seeds. Labour factor should be maximally utilized to create a favourable return to a unit of man day employed in maize production in the area.

Economic analysis and resource use efficiency of carrot production in Chitwan district, Nepal

A study was conducted from February to May 2020 to analyze the cost-benefit economics analysis and resource use efficiency of carrot production in Chitwan, Nepal. Altogether 70 households producing carrot were selected randomly and surveyed through the pre-tested semi-structured interview-based schedule. Data was entered and coded using SPSS 25 and analyzed using STATA 12.1. The study revealed that the total variable cost per hectare for carrot production was US $1803.1 and a benefit-cost ratio of 1.81 was estimated. Cobb-Douglas production function models the relationship between production output and production inputs . Production function analysis including seven explanatory variables, showed a significant positive effect of seed cost, tractor cost and human labor cost (P<0.01), fertilizer and manure cost (P<0.05) on gross return but herbicide cost, packaging cost, vitamin and micronutrients cost were found insignificant. The return to scale was found to be 1.42. According to estimated allocative efficiency indices, it is suggested to increase the seed, fertilizer and manure, tractor labor and human labor costs by approximately 45%, 74%, 67%, and 79% respectively and reduce the herbicide and packaging costs approximately by 116% and 246% respectively. The adoption of modern technologies with adjustments to resource use should be suggested to maximize the productivity and profit from carrot production.

Profitability and Resource Use Efficiency of Rice Production in Jhapa District of Nepal

Correction: Due to an oversight two authors were omitted from this paper. On 16th August 2021 Jiban Shrestha and Bidya Kiran Sapkota were added to the list of authors. This research was conducted from January to June, 2020 to determine the profitability and resource use efficiency of rice production in Jhapa district of Nepal. The primary information was collected from 100 rice growing farmers, randomly selected from the sampling frame, using the pre-tested semi-structured interview schedule; moreover, two Key Informant Surveys were also done. In addition, the secondary information was collected from the review of related literatures. Descriptive statistics, Cobb-Douglas production function were used for data analysis. The gross margin (NRs. 53,531/ha) and benefit cost ratio (2.05) indicated that rice production was profitable with the productivity of 4.5 mt/ha. The return to scale of rice production was calculated 0.86 which indicated that the production function exhibited a decreasing return to scale. The allocative efficiency indices revealed that for optimum allocation of resources, cost on seed, chemical fertilizers and irrigation cum pesticides/herbicides need to be increased by 73.8, 78.4 and 93.9% respectively; while cost on human labor and tractor power should be decreased by 53.8 and 51.5% respectively. Int. J. Soc. Sc. Manage. Vol. 7, Issue-4: 242-247

Allocative Efficiency of Maize Production in Chikun Local Government Area of Kaduna State, Nigeria

This study analyzed the allocative (cost) efficiency of maize production in Chikun Local Government Area of Kaduna State, Nigeria. Purposive and simple random sampling techniques were used to select 100 respondents. The data collected were analyzed using descriptive statistics and stochastic frontier cost function model. Results revealed that 87% of the respondents were males with 99% of the farmers in their working age group of between 21-60 years. Most (81%) of them were married with 52% of the maize farmers having household size of more than 5 people. Also, 52.0% had post primary school education. The results of the maximum likelihood estimate parameters of the stochastic frontier cost function revealed that cost of maize output, cost of labour, cost of fertilizers, cost of seeds and cost of transportation were significant at 1% level of probability. The allocative efficiency indices revealed that allocative efficiency of the sampled farmers ranged from 1.05 to 3.25 with a mean of 1.31, implying that an average farmer in the study area has costs that are about 31% above the minimum defined by the frontier. This shows that 31% of their costs are wasted compared to the best farmers producing the same maize output using the same technology. The study therefore recommends that adequate farm inputs should be provided at low cost to the farmers and adequate training should be given to the maize farmers in the area of minimizing their expenses on farm inputs in order to avoid cost wastage and become more efficient in allocation of their resources.

Economics of chhari and marketable-size carps in Bara, Nepal

A study was conducted to analyze the economics of production of chhari and marketable-size carps in Bara, Nepal. All total 90 farmers; 45 chhari producing and 45 marketable-size carps producing farmers were selected randomly and surveyed through pre-tested semi-structured interview based schedule on the month of March, 2019. Data was entered and analyzed using STATA 12.1 and SPSS 25. Findings of the study revealed that the total cost of fish production per hectare of pond area was 971927 NRs/year. Chhari production was profitable in the study area as compared to marketable-size carps with a Benefit Cost Ratio of 1.97 and 1.67 respectively. Production function analysis including six explanatory variables, showed significant effect of feed, labour (p<0.01), maintenance, fuel and electricity (p<0.05) and lime, fertilizer and medicine costs (p<0.1) but seed cost was insignificant. The return to scale was found to be 0.906 and at II stage of Production. According to estimated allocative efficiency indices, it is suggested to reduce seed; and lime, fertilizer cum medicine cost by 159% and 72% respectively, and increase the maintenance; feed; fuel cum electricity; and labour cost by about 95%, 33%, 95%, and 50% respectively for chhari producers. Similarly for marketable-size carp producers, it is suggested to decrease fuel and electricity cost by 176% and increase maintenance; seed; feed; lime, fertilizer and medicine; and labour cost by 95%, 86%, 13%, 29%, and 30% respectively. Thus, fishery enterprise is in the stage of higher potentiality to increase the production in the study area.

Analysis of cost efficiency of rainfed maize production in Yola North and Yola South Local Government Areas of Adamawa State, Nigeria

This study analyzed the allocative (cost) efficiency of rainfed maize production in Yola North and Yola South Local Government Areas of Adamawa State, Nigeria. Purposive and simple random sampling techniques were used to select 128 respondents. The data collected were analyzed using descriptive statistics and stochastic frontier cost function model. Results revealed that the respondents had a mean age of 39 years and have large household sizes. The sampled farmers are experienced and cultivated an average of about two hectares of land. The respondents had also acquired one form of formal education or the other with primary school as the least. The results of the maximum likelihood estimate parameters of the stochastic frontier cost function revealed that cost of land and cost of seeds, cost of hired labour and cost of agrochemicals were significant at different level of probabilities. The allocative efficiency indices revealed that allocative efficiency of the sampled farmers ranged from 0.44 to 0.98 with a mean of 0.68, implying that an average farmer in the study area has the scope for increasing cost efficiency by 32% given the existing technology. The study recommends provision of adequate farm inputs and essential services at low cost to rainfed maize farmers.Keywords: Cost efficiency, rainfed, maize production, Yola, Adamawa, Nigeria

Financial Liberalization and Allocation of Capital: Dark Side of the Moon

Although it is well established that financial liberalization leads to a positive ‘quantity effect’ with higher levels of investment, it remains uncertain whether it also improves the efficacy with which such investment funds are allocated. This paper contributes to this sparely researched aspect of liberalization (‘quality effect’) by carefully examining if the financial reforms in India have led to an improvement in the allocation of resources. Since one of the premises of better allocation is that funds are channelled to firms with higher marginal returns to capital (measured by Tobin’s Q), we propose three unique measures to track the efficiency of resource allocation: (a) dispersion-based measures; (b) the allocative efficiency index; and (c) the relative value of allocation. Contrary to the prevalent assumption that financial liberalization leads to higher capital allocation efficiency, this study’s findings could not establish a direct correlation between the opening up of markets and higher allocation efficiency, except for the latter part of the reform period. Further, this paper draws attention to the greater misallocation of funds in the post-reform period, as the increase in funds availability leads to excess capacity creation in some industries without consideration of the need for concurrent return or demand. The authors of this paper recommend that any financial liberalization needs to be accompanied by the setting up of institutions for corporate control, particularly in an emerging market like India.

The relation between input-output transformation and gastrointestinal nematode infections on dairy farms

Efficiency analysis is used for assessing links between technical efficiency (TE) of livestock farms and animal diseases. However, previous studies often do not make the link with the allocation of inputs and mainly present average effects that ignore the often huge differences among farms. In this paper, we studied the relationship between exposure to gastrointestinal (GI) nematode infections, the TE and the input allocation on dairy farms. Although the traditional cost allocative efficiency (CAE) indicator adequately measures how a given input allocation differs from the cost-minimising input allocation, they do not represent the unique input allocation of farms. Similar CAE scores may be obtained for farms with different input allocations. Therefore, we propose an adjusted allocative efficiency index (AAEI) to measure the unique input allocation of farms. Combining this AAEI with the TE score allows determining the unique input-output position of each farm. The method is illustrated by estimating efficiency scores using data envelopment analysis (DEA) on a sample of 152 dairy farms in Flanders for which both accountancy and parasitic monitoring data were available. Three groups of farms with a different input-output position can be distinguished based on cluster analysis: (1) technically inefficient farms, with a relatively low use of concentrates per 100 l milk and a high exposure to infection, (2) farms with an intermediate TE, relatively high use of concentrates per 100 l milk and a low exposure to infection, (3) farms with the highest TE, relatively low roughage use per 100 l milk and a relatively high exposure to infection. Correlation analysis indicates for each group how the level of exposure to GI nematodes is associated or not with improved economic performance. The results suggest that improving both the economic performance and exposure to infection seems only of interest for highly TE farms. The findings indicate that current farm recommendations regarding GI nematode infections could be improved by also accounting for the allocation of inputs on the farm.

Productivity and profitability of maize-pumpkin mix cropping in Chitwan, Nepal

The study was conducted to determine the productivity, profitability and resource use efficiency of maize-pumpkin mix crop production in Chitwan. The study used 53 maize-pumpkin mix crop adopting farmers from among 300 farmers adopting different pollinator friendly practices. Descriptive and statistical tools including Cobb-Douglas production function were used to analyze data, collected from structured interview schedule. The benefit cost ratio (1.58) indicates that maize-pumpkin mix cropping was profitable with productivity of 2.83 ton per ha on maize main product equivalent basis. The magnitude of regression coefficients of maize-pumpkin mix cropping implied that expenditure on seed and fertilizer and irrigation had significant positive effect on gross return with estimated decreasing return to scale (0.85). According to estimated allocative efficiency indices, it is suggested to increase expenditure on seed and fertilizer cum irrigation by about 90% and 55% respectively. Extension of modern technologies with adjustment on resource use is to be encouraged for increase in productivity and profitability of maize-pumpkin mix crop production which indirectly promotes and ensure forage for pollinatorsJournal of Maize Research and Development (2015) 1(1):112-122DOI: http://dx.doi.org/10.5281/zenodo.34290

Resource Use Efficiency of Mustard Production in Chitwan District of Nepal

The study was conducted to determine the profitability and resource use efficiency of mustard production in Chitwan. The study used 159 mustard growers from 300 farmers adopting different pollinator friendly practices. Descriptive and statistical tools including Cobb-Douglas production function were used to analyze data which were collected from structured interview schedule. The benefit cost ratio (1.43) indicates that mustard production was profitable with productivity of 0.81 ton per ha. The magnitude of regression coefficients of mustard implied that use of human labor, tractor, nutrient and irrigation and pesticides costs had significant positive effect on gross return with estimated increasing return to scale (1.03). According to estimated allocative efficiency indices, it is suggested to increase use of tractor labor, seed, nutrient and irrigation plus pesticides cost by about 47%, 82%, 84% and 94%, respectively. Extension of modern technologies with adjustment on resource use is to be encouraged for increase in productivity and profit from mustard production which indirectly promotes and ensure forage for pollinators. Int J Appl Sci Biotechnol, Vol 3(4): 604-608

Profitability and resource use efficiency of buckwheat (Fagopyrum esculentum Moench) production in Chitwan District, Nepal

The study was designed to determine the profitability and resource use efficiency of buckwheat production in Chitwan. The study used 42 buckwheat growers from 300 farmers adopting different pollinator friendly practices. Descriptive and statistical tools including Cobb-Douglas production function were used on data collected from structured interview schedule to accomplish the objectives. The benefit cost ratio (1.25) indicates that buckwheat production was profitable. The magnitude of regression coefficients of buckwheat implied that use of tractor and nutrient cost had significant positive effects on gross return. According to estimated allocative efficiency indices, it is suggested to reduce labor and seed cost by about 148% and 143%, respectively and; increase the use of tractor and nutrient inputs by about 63% and 19%, respectively. Extension of modern technologies with adjustment on resource use explains for increase in return and profit from buckwheat production which indirectly promotes and ensure forage for pollinators in study area.

EFFICIENCY OF RESOURCE USE AMONG POND FISH FARMERS IN CENTRAL UGANDA: A STOCHASTIC FRONTIER PRODUCTION FUNCTION APPROACH

This article presents the use of a stochastic frontier production function to examine the efficiency of resource utilization in pond fish farming in Uganda. The study draws on data from a field survey administered to 200 small-scale fish farmers in three major fish farming districts in Central Uganda: Mukono, Mpigi and Wakiso. The districts were part of a large aquaculture development project funded by the United States Agency for International Development-Aquaculture and Fisheries Collaborative Research Support Program. Productive efficiency was analyzed using stochastic frontier analysis with a translog production function while assuming a truncated-normal distribution for the inefficiency term. The output variable was total quantity of fish produced, while input variables were quantity or value of inputs used in the production process, namely labor, pond size, stocking density, capital and feeds. The estimated index of resource-use efficiency revealed that small-scale farmers were inefficient in resource allocation by over-utilizing labor with an estimated allocative efficiency index of −0.94 and grossly under-utilized pond size, feeds and fingerlings with allocative efficient indices of 1.15, 1.64, 3.71, respectively. The results suggest that there is considerable scope to expand output and also productivity by increasing production efficiency at the relatively inefficient farms and sustaining the efficiency of those operating at or closer to the frontier.

Resource Use Efficiency in Rice Production: the Case of Kpong Irrigation Project in the Dangme West District of Ghana

This study was conducted to determine the efficiency of resource use in rice production with the Kpong Irrigation Project (KIP) as a case study. Seventy farmers were selected using the simple random sampling technique. The Cobb-Douglass production function was used to estimate the coefficients of the various variables analysed and MPP, MVP and allocative efficiency index were also used to estimate the efficiency of resource use in the study area. The regression results showed that the farmers were in the second stage of production, which is, decreasing returns to scale (using the elasticities). The results of the efficiency computation indicated that land (6.63), fertilizer (1.76) and seed (10.84) were being underutilized and labour (0.000036) and chemicals were being highly over utilized in the study area. The study recommends that KIP should embark on repair works on the roads, provide appropriate machinery services and desilting the drains.

Profitability And Resource Use Efficiency In Maize Production In Kontagora Local Government Area, Niger State, Nigeria

The study examined profitability and resource-use efficiency in Maize Production in Kontagora Local Government Area of Niger State, Nigeria during 2007 cropping season. Primary data were collected and analyzed using farm budgeting techniques and Production Function Analysis. Results indicatedthat farmers realized and average farm income and gross margin of N242, 114.00 and N 269,862.78 respectively whose equivalents in US Dollars stood at US $2,029.80 and US $2,262,43 respectively as at the time this study was carried out. The result of the allocative efficiency index indicated that farmsize , labour and fertilizer were over utilized, while other inputs and capital inputs were under utilized. It is recommended that surplus labour should be channeled into other income generating ventures during off-peak periods of labour demand.

The effects of privatization on return to the dollar: A case study on technical efficiency, and price distortions of Taiwan’s intercity bus services

The purpose of this paper is to apply a hyperbolic graph efficiency approach to measure “return to the dollar” at the station-level of the Taiwan Motor Transport Company before and after privatization. The “return to the dollar” measure is decomposed into two components: a technical efficiency and allocative efficiency index. Price distortions are measured by allocative efficiency using data on observed costs and revenues, without requiring explicit information on prices. The decomposition results indicate that both technical and allocative efficiencies contribute to the growth of “return to the dollar”, with the allocative component playing a more important role than the technical component. Perhaps in an attempt to cover the inefficiency-induced losses, both the public and private firms apparently resort to distorting relative output prices with respect to input prices, and the distortion is more pronounced in the private firm than in the public firm. A statistically significant increase in technical efficiency took place following privatization, implying that the private firm converted input resources into output more effectively than its predecessor.

Hyperbolic efficiency and return to the dollar

This paper, after establishing the relations between hyperbolic graph measure of technical efficiency and the radial measures of technical efficiency, shows that the dual, cost and revenue interpretation of the hyperbolic efficiency measure is related to Georgescu-Roegen's notion of “return to the dollar” [N. Georgescu-Roegen, in: Koopmans, T. (Ed.), Activity Analysis of Production and Allocation, Wiley, New York, 1951, pp. 98–115]. Once this relation is established, it leads to a derivation of an allocative efficiency index, which measures the price distortions using data on observed costs and revenues without requiring information on prices.