Technical Inefficiency Effects Research Articles

Technical efficiency of early variety country bean cultivation in selected areas of Bangladesh: a stochastic frontier approach

The present study was undertaken to measure the profitability and technical efficiency of early variety country bean cultivation in selected areas of Chatmohar upazila of Pabna district. A total of 60 early variety country bean-growing farmers were selected from three villages of Chatmohar upazila using a simple random sampling technique. Stochastic frontier production function was applied to determine the technical efficiency of the country bean growers. Technical inefficiency effects model was also applied to identify the demographic and socio-economic factors by which inefficiency effects are influenced. The study revealed that Benefit Cost Ratio (BCR) was the highest (2.29) for large farmers followed by medium (2.27) and small farmers (2.21). The result of the Maximum Likelihood Estimates (MLE) showed that human labor, fencing and manure had significant positive impact whereas the irrigation and insecticides had a negative impact on the production of country bean. The results of technical inefficiency effect model showed that farmer’s age, farm size had negative impact while education, family size and farm credit had positive impact on technical efficiency. The inefficiency analysis results indicated that farm level technical efficiency ranged between 43.06% and 98.01% with a mean technical efficiency of 91.9% implied that there was potential to increase country bean production among smallholder farmers in the study area by 8.1% through efficient use of present technology. The main constraints to country bean (early variety) production were identified as- infestation of pest and disease, high price of inputs, paucity of quality seed and fertilizer, scarcity of human labor, lack of technical knowledge, limited access to institutional credit etc. Despite the constraints, there is a great prospect of early variety country bean production in the study areas. Country bean (early variety) production could be increased in a sustainable manner if farmers would be provided with government support regarding lower price of input, fair price of output, marketing facilities, training for farmers and farm credit at low interest rate, reducing the activities of syndicate of middlemen. Government should provide necessary support to the farmers for ensuring sustainable production of early varieties of country bean. Res. Agric. Livest. Fish. Vol. 10, No. 2, August 2023: 155-164

Resource Use Efficiency and Cleaner Agricultural Production: An Application of Technical Inefficiency Effects Model for Paddy Producing Zones of West Bengal

It is possible to enhancement of agricultural productivity with environmental sustainability through efficient utilization of resources. This hypothesis is examined by the efficiency and the responsible factors for controlling inefficiency of the farms. The empirical analyses are conducted based on the secondary data of 14 960 farms scattered into five different paddy producing zones of West Bengal, India. The Efficiency estimates disclose that clayey soil texture zone is the most efficient and sandy and gravelly soil texture zone is the least efficient concerning paddy production. The study concludes with appropriate policy implications that the inefficiency on the part of the farms is caused by inefficient utilization of the chemical fertilizers, viz., nitrogen and potassium and insecticides and by the efficient utilization of this the farm can increase its productivity with environmental sustainability.

Starchy staples production shortfalls in Ghana: Technical inefficiency effects outweigh technological differences across ecologies.

Starchy staples are a major source of livelihood support for farmers, traders, and processors who participate in these crops' value chains, while also providing staple food to many people, especially the less affluent in society. Despite this position, the productivity figures of starchy staples are low. We use a unique data set and meta-frontier efficiency analysis to assess whether the production shortfalls of major starchy staple crops in Ghana could be attributed to technical inefficiency, technology gaps or both. Results show strong evidence of about 50% production shortfall for cassava, yam, cocoyam, and plantain. For cassava production, the Guinea Savannah zone has the most superior technology, with a technology gap ratio of 0.92, while yam production is more technically efficient in the Sudan Savannah zone, with a technical efficiency score of 0.67. Cocoyam production is more technically efficient (0.56) in the Transition zone, but yam is more technically efficiently produced in the Coastal Savannah zone of Ghana. These results show that production shortfall is more influenced by pure farmer technical inefficiencies (about 45%) rather than by technology gaps (about 20%) along ecological lines. Thus, the sector could benefit from improvements in farmer managerial skills and efficient use of existing technologies.

Efficiency of Pineapple Production and its Determinants: A Case Study of Manipur

The study was conducted in the hills and valley regions of Manipur with the objectives of assessing the level of technical efficiency and determining the factors influencing the technical inefficiency of pineapple production in the state during the year 2022-23. A total of 240 farmers were interviewed in person to gather primary data. A stochastic frontier technique was used in the study to achieve the stated objectives. Results showed that pineapple production was a profitable business. However, the study’s efficiency score of 0.603 indicated that farmers were operating inefficiently. The estimated stochastic production frontier model showed an adverse association between the cost of the sapling, transportation, fertilizer, and manure to the efficiency of pineapple production. According to the technical inefficiency effect model, the only factors that positively explained the technical inefficiency in pineapple production were the farmers’ age and household size while factors like education, years of farming experience, credit availability, and contact with extension agents had a negative effect. Therefore, the study concludes that attracting youth in agriculture, extension services, and production inputs availability has to give due attention to augment the effectiveness of pineapple production across the state and nation as a whole.

Technical efficiency of health production in Africa: A stochastic frontier analysis

Background: Inefficiency is widespread in health systems all over the world. The World Health Organization (WHO) estimates that 20%-40% of the global health spending is wasted. In African countries, inefficiency of this magnitude will seriously hamper progress towards achieving universal health coverage and other health system goals. It is thus, significant to assess the efficiency of health systems over time in order to set the ground for identifying the contextual factors leading to inefficiency and design appropriate efficiency-enhancing measures.Methods: Using panel data for the years 2000, 2005, 2010, and 2015, the study employs a time-variant stochastic frontier production function to assess efficiency. The input measure used is current expenditure per capita in purchasing power parity (Int$) terms and the measure of output is health-adjusted life expectancy (HALE). Moreover, mean years of schooling, GDP per capita in Int$, and out-of-pocket payment as a share of current expenditure on health were used as technical inefficiency effect variables. Data were analyzed using Frontier Version 4.1.Results: The mean technical efficiency scores were 79.3% in 2000, 81% in 2005, 85.6% in 2010 and 88.3% in 2015. Over the four periods of time, Cabo Verde registered the highest technical efficiency scores, while Eswatini and Sierra Leone had the lowest. The minimum technical efficiency scores were 58.7% (in 2000), 59.1% (2005), 67.4% (2010) and 71.8% (2015). These indicate that despite improvements, there is a significant degree of technical inefficiency. Most of the countries among those in the bottom 10% efficiency scores are countries in Southern Africa, which in 2015 had a very high prevalence of HIV among adults, compared to the top 10%, which had prevalence rates of less than 0.1%.The mean efficiency score increased progressively over time – a nine percentage point increase between 2000 and 2015. The elasticity of current health expenditure was positive (0.06) and statistically significant. All the technical inefficiency variables had no statistically significant effect.Conclusions: Over the period of time covered in this study, there was some improvement in the average technical efficiency scores. However, there was also marked inefficiency in many countries, which is likely to hamper their progress towards universal health coverage and other health system goals. In a context where health spending is too low to provide needed services, it is imperative to address the causes of technical inefficiency and produce more health for the money. Furthermore, low-performing health systems should learn from their relatively high-performing peers.

Women's political leadership and efficiency in reducing COVID-19 death rate: An application of technical inefficiency effects model across Indian states

Evidence from earlier studies on COVID-19 suggests that the countries led by female leaders were more successful in handling the COVID-19. India being a patrilocal society evident that women's political autonomy in the Gram Panchayat does miracles concerning development. With this backdrop, the present paper aims to explore the role of women's political participation and leadership on the efficiency in reducing the COVID-19 death rate for Indian states. This predominantly empirical paper is entirely based on secondary data compiled from different sources. The empirical analysis of the paper is facilitated by the utilization of the Technical Inefficiency Effects model within the framework of Stochastic Production Frontier. The empirical results accredit us to conclude that the efficiency of the Indian states in reducing the COVID-19 death rate is highly influenced by female political participation and leadership, digitalization, urbanization, and literacy rate. The study ends with suitable policy prescriptions.

Production Efficiency of Sorghum: The Case of Smallholder Farmers in Kafta-Humera District Tigray Ethiopia

Efficiency is an important factor for increasing productivity which leads to increase market output to achieve the goal of food security. In economics where resources are scarce and opportunities to use new technologies are limited, increasing efficiency remains the most reasonable means to raise productivity without necessarily developing new technologies or increasing the resource base. So, this study aimed to investigate level of production efficiency, factors affecting production inefficiency of sorghum small holder farmers in Kafta-humera district of Tigray Ethiopia. A two stage sampling technique was used to select 289 sample farmers who were interviewed using a semi- structured questionnaire to obtain data pertaining to sorghum production during the year 2016/2017.Stochastic production frontier model was used to identify production efficiency levels, where as Tobit models was used to estimate factors affecting production efficiency levels. Accordingly, the mean technical, allocative and economic efficiencies were 78.01%, 65.21% and 39.91% respectively. This implies that output can be increased by 21.99% or cost can be reduced by 34.79% with the existing level of technology and resources. Input variables such as land, labor, tractor plow power, chemicals, DAP and Urea fertilizers positively affects production of sorghum. The discrepancy ratio (γ) implied that about 91.91% of the variation in sorghum production was attributed to technical inefficiency effects. Tobit model revealed that age, education, non-farm income, credit, extension service and training positively and significantly affected technical efficiency while age square and total livestock holding had negatively and significantly affected. Additionally, age square, education and frequency of farm visit positively and significantly affected allocative efficiency, while age, non-farm income, credit and extension contact have a negative and significant affect. Economic efficiency was positively and significantly affected by age, education, non-farm income, credit, extension contact and frequencies of farm visit but negatively affected by age square. These indicate that there is a room to increase in production efficiency of sorghum in the study area. Therefore, government authorities and other concerned bodies should take into consideration the above mentioned demographic, socioeconomic and institutional factors to increase efficiency of sorghum.

Efficiency Analysis of Lignite Mining Operations Using Production Stochastic Frontier Modeling

This paper proposes a stochastic frontier model for measuring both technical and environmental performance at the mine level by using a translog production function. The Kardia Field opencast lignite mine of the Greek Public Power Corporation (PPC), S.A. is the topic of the case study. Efficiency ratings are derived over a long period of time using annual operating data, and in addition, the determinants of inefficiency are established by means of the technical inefficiency effects model. In the light of the results, there is a strong correlation between technical and environmental efficiency; the results are validated by those produced by data envelopment analysis (DEA). In addition, the stripping ratio is identified as the statistically significant determinant of performance. The proposed framework could be used as an instrument to measure the efficiency of lignite mining operations and to identify the drivers of performance.

Technical efficiency of smallholder honey farmers in Jimma zone, Ethiopia

This study analyzes technical efficiency and determinants of the efficiency of honey production in the Gomma and Gera districts of the Jimma zone. The data were obtained from 194 randomly selected honey-producing smallholder farmers. A Cobb - Douglas stochastic frontier production analysis with the inefficiency effect model was used to estimate technical efficiency and identify the determinants of efficiency variations among honey farmers. The study showed that several hives and supplementary feeds positively and significantly influenced honey yield. This shows that there is room to increase honey productivity from the current level if farmers can efficiently use these input variables. The result further showed that there were differences in technical efficiency among honey producers in the study area. The discrepancy ratio, γ, which measures the relative deviation of output from the frontier level due to inefficiency, was about 84%. This implies that about 84% of the variation in honey output among the farmers was attributed to technical inefficiency effects. The estimated mean level of technical efficiency of honey producers was about 74%. This reveals that there is a possibility to increase the level of honey output by about 26% through exploiting the existing local practices and technical knowledge of the relatively efficient farmers. The education level of the farmer, landholding, income, extension contact, and training were found to determine technical efficiency significantly. Therefore, the concerned sector should focus on the above variables to enhance the technical efficiency of honey producers in the study area.

Technical Efficiency Analysis of Pineapple Production at Madhupur Upazila of Tangail District, Bangladesh

The main objective of this study is to analyse the technical efficiency and its determinants of pineapple production at Madhupur upazila of Tangail district in Bangladesh. Cross-section data from a sample of 100 pineapple producers during the 2016-17 cropping season were collected by applying multistage random sampling technique. Farm specific technical efficiency scores were estimated using the Cobb-Douglas stochastic frontier production function approach. Empirical findings show that the estimated technical efficiencies of the sampled farmers’ range from 61.61% to 99.95% with the mean technical efficiency of 91.14%. The result suggests that, on an average, farmers in the study area can potentially increase their productivity by 8.86% through more efficient use of inputs. The estimated stochastic production frontier model indicates that input variables such as area, tillage cost, seedling cost and human labour cost were statistically significant variables to increase the quantity of pineapple production. Technical inefficiency effect model identifies that age of farmers had significant positive, but years of schooling and extension contact had significant negative effect on farmers’ inefficiency. The study therefore recommends that government should focus on the ways of attracting and encouraging the youths as they are more efficient and are likely to be able to properly allocate resources and are willing to adopt new technical innovations. Besides, policies and strategies should be directed towards increasing farmers’ formal as well as informal education through the implementation of effective training programmes by the well-trained extension workers.

Technical Efficiency of Maize Producer Smallholder Farmers in Alefa Woreda, North Western Ethiopia

Efficient uses of the existing resources by farm households improve their productivity and thereby increase their output. Maize is one of the dominant crops in the study area; however its productivity is very low. This shows that it is possible to raise output from existing inputs used if resources are properly used and efficiently allocated. The productivity of maize can be changed due to differences in the efficiency of the production process. Hence, this study aimed to analyzing the technical efficiency of maize production in Alefa District of central Gondar in Ethiopia. The objective of study was to measure the level of technical efficiency of maize producers and to identify the determinants of technical efficiencies in maize production among smallholder farmers in the study area. To address the objective of the study both primary and secondary data were collected. The primary data were collected from 152 maize producer farmers by two- stage sampling technique during 2019/20 production season. For data collection personal interview through a structural interview scheduled was employed. Both descriptive and inferential statistics were used for data analysis. Technical efficiency of sampled farmers in maize production was estimated and analyzed by Cobb-Douglas functional form in stochastic frontier model (SFM) with single stage estimation method. The estimated SFM indicated that input variables (land, labor, oxen and DAP) were found significantly and positively influence maize production. The production of maize by sampled farmers was characterized in constant return to scale (1.08). The estimated gamma (γ) parameter was 0.91, which measures the relative deviation of output from the frontier level due to inefficiency. This implies that about 91% of the total variation in maize output was due to technical inefficiency effects. The estimated mean level of TE of maize producers was 0.82. This implies that production can be increased by 18 percent given the existing technological level. The results of this study indicated that among the farm specific, socioeconomic and institutional factors hypothesized to affect TE, age, family size, education status, frequency of extension contact, off farm income and credit access were significant determinants of the production level of maize. The findings obtained in this study could be quite useful to policy makers. Policy interventions should focus more on timely supply of DAP, and socioeconomic significant variables such as education, age, credit access, off farm income, family size and extension contact improve farmers’ efficiency in production of maize. Key words/Phrase: Maize Production, Single Stage Estimation, Stochastic Frontier Model, Technical Efficiency DOI: 10.7176/JAAS/68-05 Publication date: September 30 th 2020

An Estimation of Technical Efficiency of Tea Smallholdings in Ratnapura District of Sri Lanka

While accepting the fact that the tea smallholdings sector of Sri Lanka immensely contribute to the annual tea output of the economy, the sector still faces various deficiencies due to problems pertaining to input related issues. Measuring the level of efficiency and identifying the factors which are attributed to inefficiency are in utmost importance in introducing remedies for that. A cross sectional survey was conducted on a sample of tea smallholders in Ratnapura district where highest contribution to the total tea production of the country is made. In this study, the Cobb-Douglas Stochastic production frontier model was used by incorporating the technical inefficiency effect model to estimate the level of technical efficiency in tea smallholdings sector. The study revealed that average technical efficiency of tea smallholdings sector in the study area was 87.36 percent that keeps a margin of 12.64 percent for further improvements through better use of available resources and technology. The results of the Cobb-Douglas model revealed that the estimated coefficients of land, labor and fertilizer are positively and significantly affect the green leaves production of the sector. The findings of the inefficiency model disclosed that age, farming experience, level of education, occupation, age of tea plants, farming group membership and credit access have significant negative impact on technical inefficiency

Technical Efficiency in Honey Production: The Case of Illubabor and Buno Bedelle Zones, South Western Ethiopia

The gap between demand for and supply of food can be reduced by improving productivity either through introduction of modern technologies or improving the efficiency of inputs. However, in developing countries like Ethiopia, improving the efficiency of inputs has received the utmost attention. As production of honey is a significant contributor to the Ethiopian economy, increasing production and productivity of inputs in honey production could be taken as an important step in attaining food security. Therefore, this study was aimed at analyzing the technical efficiency in honey production in Iluabbabor and Bunno Bedelle zones using cross sectional data collected from randomly selected 180 sample households during 2017/18 production season. Cobb-Douglas production function was fitted using stochastic production frontier approach to estimate technical efficiency levels, whereas tobit model was used to identify factors affecting technical efficiency levels of the sample farmers. The estimated results showed that the mean technical efficiency was 51.05% that indicated there was significant inefficiency in honey production in the study areas. The discrepancy ratio (γ), which measures the relative deviation of output from the frontier level due to inefficiency, implied that about 51.05% of the variation in honey production was attributed to technical inefficiency effects. Among factors hypothesized to determine the level of technical efficiency, family size, hive size and experience of household head in honey production were found to determine technical efficiency of farmers positively while distance of household head from the nearest market had negative impact with technical efficiency. The result indicated that there is a room to increase the efficiency of honey producers in the study areas. Hence, the efficiency level of less efficient farmers should be improved by adopting the practices of relatively efficient farmers in the area. Keywords : honey, efficiency, Cobb-Douglas, stochastic frontier, tobit DOI: 10.7176/JAAS/67-03 Publication date: August 31 st 2020

Performance analysis of electricity distribution sector post the implementation of electricity act 2003: empirical evidence from India

PurposeThe objective of the present study is to evaluate and analyse the performance of Indian electricity distribution utilities post the implementation of landmark Electricity Act 2003.Design/methodology/approachStochastic frontier analysis (SFA) that incorporates exogenous influences on operational efficiency is adopted in the present study. Specifically, a stochastic frontier production function model with a technical inefficiency effects model (Battese and Coelli, 1995) is chosen as a preferred model. In this model, the function that explains the inefficiency scores is estimated in a single stage with the production technology. This avoids the problem of inconsistency which is possible in the two-stage approach.FindingsThe sample involved 52 Indian electricity distribution utilities for seven-year period from 2006 to 2013. Major findings of SFA show that Indian electricity distribution utilities post the implementation of Electricity Act (2003) had, on average, experienced efficiency improvement during the observed period. The overall mean technical effciency score is estimated as 78.5% which indicates that there exist wide scope for effciency improvement in the sector. Further, the empirical findings also indicate that publicly owned distribution utilities obtain average technical efficiencies of 71.3%, which is lower than privately owned distribution utilities, which achieve average technical efficiencies of 85.7%.Research limitations/implicationsPower supply quality indicators such as SAIFI, SAIDI, CAIFI, etc. and unobserved heterogeneity also influence the efficiency analysis of electricity distribution utilities. Hence, these parameters as explanatory variables can be incorporated in the future work.Practical implicationsThe results obtained from this empirical study would likely be helpful for utility managers and policymakers to know how well they are performing, and how a better corporate strategy a particular utility can formulate to improve its operational efficiency and also its position in the marketplace.Originality/valueThis paper is amongst the first significant attempts that implement SFA approach to the panel dataset over a longer period of time – 2006 to 2013, so, as to evaluate and analyse the operational efficiency of Indian electricity distribution utilities in a single framework after the enactment of Electricity Act (2003). Unlike previous studies, this study investigates the degree to which various exogenous (or environmental) factors influence efficiency levels in these utilities.

Efficient Management of Farm Resources and Food Consumption Level of Pond Fishers in North-Central Bangladesh

Aims: The study was conducted to assess the efficient management of farm resources of pond fish farmers and level of their household food consumption in order to deal with sustainable development of pond culture system and food security issue.
 Study Design: Three unions out of 9 in Melandah upazila of Jamalpur district were selected, as a large number of ponds are available. Sixty fish farmers were randomly selected from the population of 200. Data were collected using a structured questionnaire during January to March 2017.
 Methods: Cobb-Douglas stochastic frontier production function and technical inefficiency effect model were used to assess efficient management of farm resources. Also, multiple regression models in double-log forms were employed to determine the factors influencing households’ per capita food consumption, calorie intake and protein intake.
 Results: Gross return and net profit were $8,081 and $2,262 respectively and cost benefit ratio was 1.39. Technical inefficiency estimates show that farmers’ education (0.0009) and training (0.0042) had insignificant but positive sign for fish production. Experience (-0.0083) and culture period (-0.0054) had significant and negative sign and age of farmers has insignificant negative sign indicated that technical efficiency increased with the increase in experience and fish culture period. The mean efficiency was 0.92 in fish farming indicates 8% of fish production could be increased with the existing resources and available technology. Per capita per day food consumption was 1288.36 g, calorie intake 2592.23 k. calorie and protein intake 84.27 gram.
 Conclusion: A linkage between Upazila Fisheries Officer, Bangladesh Fisheries Research Institute, fisheries extension workers and pond fish farmers should be established. Calorie and protein intake of the farm households is higher due to increase of food sufficiency of the country and buying capacity of the farmers but the nutritional wellbeing of them is still low.

English

The study is aimed at determining the technical efficiency of rice farmers in Anambra State value chain development programme. A well-structured questionnaire was administered to elicit information from 372 rice farmers from the five participating Local Government Areas (Ayamelum, Awka North, Anambra West, Anambra East, and Orumba North) after which only 337 respondents were fit for the study. Cobb Douglas stochastic frontier model was used to ascertain the frontier line of the farmer’s production potentials. The determinant of technical inefficiency was sex and farming experience. The findings revealed that the gamma value (0.0315) captures the variation in technical efficiency by farmers, therefore, about 3.15% variation is observed and frontier output is due to rice farmer’s technical inefficiency effect. The study equally showed that the mean technical efficiency as predicted in the study was 84.76% implying that the farmers are operating 15.24% below their optimum production capacity. These, therefore, justify the need for policymakers to constantly organize training and sensitization workshops for the rice farmers in Anambra State and Nigeria at large paying particular attention to women farmers and the general farmer’s farming experience which will help to tailor down training to specific needs. Key words: Stochastic frontier, technical efficiency and inefficiency, return to scale, influence, utilization, sensitization.

Does greater school resource allocation improve efficiency in education production? Performance assessment of Spanish public sector-funded schools

PurposeThe purpose of this paper is to measure the efficiency performance of public sector-funded schools in Spain.Design/methodology/approachUsing school-level data from Program for International Student Assessment 2012, cross-sectional models were estimated using stochastic frontier analysis (SFA). Technical efficiencies of public sector-funded schools (public schools andcentros concertados), and their determinants were estimated using a one-step maximum likelihood procedure. SFA models include both a stochastic error term and a term that can be characterized as inefficiency; the non-negative technical inefficiency effects are assumed to be a function of school characteristics.FindingsThe results show that greater school autonomy and school responsibility for resource allocation are associated with efficiency improvement. Subsidized private schools (calledcentros concertados) were more efficient than public schools. The former are free of bureaucratic constraints that encumber public schools, and they are able to control many more decisions at the school level (e.g. they select their own teachers).Originality/valueThis paper shows the value of school autonomy for educational performance. The author defines school autonomy as the operational empowerment of the principals and teachers. Therefore, the government could grant greater autonomy to public schools (school-based management), since school autonomy is a driver of efficiency. Further, teachers’ morale is also an environmental driver of efficiency. Schools tend to be more efficient when teachers work with enthusiasm or value academic achievement. And this is more likely to occur in private schools, even though teachers are hired (they are not civil servants) and have a lower salary than public school teachers. The lack of motivation of many teachers in public schools may be in the absence of incentives – there is no possibility of promotion and everyone is guaranteed a wage increase every three years –and in the bureaucratization of the public school system.

Technical Efficiency of Agricultural Production in Ethiopia

Farmers faced low productivity due to lack of knowledge on maximizing level of output at the given level of inputs. Technical efficiency of agricultural production in the Ethiopia were assessed by using cross-sectional secondary data collected from Ethiopia socioeconomic survey in 2015/16 production year. Cobb-Douglas stochastic frontier production function model was used to estimate technology and determinants of technical inefficiency simultaneously using the maximum likelihood estimator (MLN). MLN estimation results showed that increasing input use like area, seed, oxen, fertilizer and labor would increase yield of agricultural production. The coefficients of elasticity for area, seed, oxen, fertilizer and labor were 0.21, 0.29, 0.38, 0.12 and 0.10 respectively. Consequently, agricultural production exhibits increasing return to scale because the sums of input elasticity’s were greater than one which is 1.1. The mean technical efficiency of farmers in the agricultural production was about 36%. The implication is that there is an opportunity to increase output on average by 64% through efficient use of inputs given the current input use and technology. The discrepancy ratio gamma (γ) which measures the relative deviation of output from the frontier due to inefficiency was about 86 percent indicating that about 86% of variation in agricultural production among the farmers was attributed to technical inefficiency effects. Thus, it is possible to improve technical efficiency through better use of these factors. Keywords: Technical efficiency, Cobb-Douglas stochastic frontier and Smallholders. DOI: 10.7176/JNSR/10-5-05 Publication date: March 31 st 2020

Diversification, efficiency and productivity in catch share fisheries

This study investigates the relationship between diversification, technical efficiency (TE), and productivity in the US Gulf of Mexico commercial red snapper fishery. We estimated a vessel-level input-oriented stochastic distance frontier simultaneously with a technical inefficiency effects model using a 20-year unbalanced panel (1997–2016). The panel documented the fishing activities of 1,255 fishing vessels, 10 years before and after the adoption of the red snapper catch share program in 2007. Our study points to the desirability of diversification in catch share fisheries. It shows that red snapper fishers who diversified their fishing portfolio tended to be more productive and technically efficient. The study found evidence that diversification resulted in cost savings from catching multiple species (diversification economies), and that the productivity of the fleet increased (diversification efficiencies). The analysis also showed that the TE of the fleet increased in the catch share period. The average TE rose from 0.78 in the command and control period to 0.85 in the catch share period. Higher TE scores were associated with higher levels of diversification. Our results suggest that policies that encourage diversification such as reducing quota ownership caps, adjusting quota carryover provisions, and providing governmental assistance to increase participation in other fisheries deserve further attention.

Technical Efficiency of Red Pepper Production: The Case of Dalocha District, Southern Ethiopia

Increasing the productivity of red pepper is important to meet the need of ever increasing population. However, farmers faced the problem of productivity due to the lack of knowledge on how to maximize level of output at a given level of inputs. The objective of this study was to assess the technical efficiency of red pepper production in Dalocha district of southern Ethiopia. Cobb-Douglas stochastic frontier model was used to estimate the technical efficiency and its determinants in red pepper production. Maximum likelihood estimation results showed that increasing input variables (oxen power, seed, labor and fertilizer) would increase yield of red pepper. The discrepancy ratio,γ, which measures the relative deviation of output from the frontier level due to inefficiency was about 85 percent indicating that about 85% of variation in red pepper yield among the farmers was attributed to technical inefficiency effects. The mean technical efficiency of farmers was about 80%. The implication is that, there is an opportunity to improve technical efficiency among farmers on average by 20% through efficient use of inputs. Thus, it is possible to improve technical efficiency through utilizing available inputs wisely. Keywords: Red Pepper, Technical Efficiency, Cobb-Douglas stochastic frontier. DOI : 10.7176/IEL/10-1-01 Publication date: January 31 st 2020