Level Of Technical Inefficiency Research Articles

EFISIENSI TEKNIS USAHATANI PADI SAWAH PADA PERTANIAN PERKOTAAN DI KOTA SEMARANG: PENDEKATAN STHOCHASTIC FRONTIER

Improving food self-sufficiency requires a strategy to increase paddy rice production. The urban agriculture initiative in Semarang City is seen as a suitable policy. However, the current increase in agricultural productivity through improved production efficiency is hampered by land conversion and inappropriate use of production inputs. The objective of this study is to assess the technical efficiency of wet-rice farming and its influencing factors in Semarang City. Cross-sectional data from 68 respondents were used in this study. The data analysis strategy used in this study is Maximum Likelihood Estimation (MLE) combined with Stochastic Frontier Cobb Douglas production function. The results show that land area, seeds, NPK, urea, and pesticides are the main determinants of rice production. Paddy rice cultivation in Semarang City is technically efficient (0.73). Formal education and other sources of off-farm income are factors that influence the level of technical inefficiency of wet-rice cultivation. Strategies to achieve food self-sufficiency in urban agriculture include developing extension strategies and improving agricultural infrastructure.

Productivity and efficiency: Do we need a bridge?

The paper focuses on comparing two popular approaches to estimating firm production technology: the proxy-variable method and the stochastic frontier (SF) analysis approach. We show that although the economic interpretations of productivity and efficiency are not the same, the difference between them is not fundamental and even trivial as far as the estimation techniques are concerned when the same structural framework is assumed. By showing the connection and comparing the difference between these two methods, this paper is aimed at building a bridge to connect these two strands of literature. In addition, we provide the SF audience with a new estimation method, i.e., the modified proxy-variable method, with its advantages in handling the endogeneity issue, along with a new way to estimate technical inefficiency. We examine their finite sample performance using Monte Carlo simulations. In the empirical section, we compare the proposed estimator with the conventional MLE SF estimator using Chinese manufacturing firms in the computer and peripheral sector over the period 1998 to 2007. We find that the estimates from our method are more reasonable in explaining the production behavior of these firms, and firms’ technical inefficiency levels are highly persistent over time.

Yield Gaps and Factors Affecting Production Inefficiency in Smallholder Oil Palm Plantations in Muaro Jambi District Jambi Province

Abstract Oil palm plantations in Indonesia, including in Jambi Province, are categorized into large private plantation, state-owned plantation, and smallholder plantation. The productivity of smallholders is the lowest compared to the other 2 categories. At the district and sub-district level, the yield of smallholder oil palm is also vary, spreading from 1,675 to 6,680 kg CPO per ha per year. The large yield variation is inseparable from the plantation management among farmers. The objectives of this research are to study the yield gap and technical efficiency of production among smallholders, and to analyze the factors that affect the technical production inefficiency in smallholder oil palm plantation. The research was conducted in Muaro Jambi District as a main palm oil producing district in Jambi Province. Data was collected from a sampel of 120 independent smallholders. One way anova test was used to study the yield gap and double natural log (ln) of Cobb–Douglas stochastic frontier production function was used to analyze the technical efficiency and some factors affects its inefficiency. The results revealed that there were significant differences in yield among smallholders based on area size, level of education, and activeness in the farmer organizations. However, on average, the management of oil palm by independent smallholders is quite technically efficient. The factor that significantly affects the level of technical inefficiency are the size of the area and farmers’ level of education.

Technical efficiency of factors affecting soybean farming in Tanjab Timur Regency

This research was carried out with the aim of: Knowing the general description of soybean farming in Tanjab Timur Regency, Analyzing the level of technical efficiency of soybean farming in Tanjab Timur Regency, Analyzing the level of technical inefficiency of soybean farming in Tanjab Timur Regency. The analytical tool used is Stochastic Frontier production function analysis with Cobb- Douglas and calculating the level of efficiency and inefficiency. This research was conducted in Tanjab Timur Regency. The sampling technique was the census method with a sample of 120 farmers. The data used is secondary and primary data. The research results showed that: The condition of the land in the research area is tidal land with an average production of 1,039, The use of production inputs in the research area is technically efficient, reaching 0.767. Socio-economic factors such as age and education variables have no real effect and increase inefficiency while experience variables, number of family members and extension have no real effect, but increase technical efficiency or reduce inefficiency, Simultaneously or partially age, education, experience, number of family members and extension has no real effect on production.

Does practicing healthy lifestyles improve the technical efficiency of farms?

PurposeThe purpose of this paper is to ascertain if practising healthy lifestyles improves the technical efficiency of farms in Kwara state, Nigeria. In theory, all deviations from the optimum level of output are due to random effects and inefficiency of producers in which their health plays a key part and is dependent on the kind of lifestyle practiced whether healthy or unhealthy.Design/methodology/approachCross-sectional data were employed through a three-staged sampling technique to pick 320 arable crop farmers across the state using a well-defined questionnaire. Data analysis was carried out using descriptive statistics, healthy lifestyles index (HLI), stochastic production frontier (SPF) and propensity score matching (PSM).FindingsFirst, the analysis showed that about one-third of the sampled arable crop farmers practised healthy lifestyles. Second, the average technical efficiency of arable crop production for farmers who practised a healthy lifestyle was 0.893, and the level of technical inefficiency of the farms was determined by health-related lifestyle status, number of day's illness and educational level. Third, technical efficiency was improved by 0.00431067 for farms whose farmers practised a healthy lifestyle.Originality/valueRather than seeing that technical efficiencies of farms are attributed to farm characteristics, inputs used and socioeconomic characteristics alone, the findings suggest that technical inefficiencies of arable crop farmers were also due to the kind of lifestyle practised, which was evidenced in the increased efficiency for farmers who practised healthy lifestyle.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-05-2023-0353

Spatial and temporal fishery management assessment using DEA: Case study of spanner crabs in Queensland, Australia

The aim of this case study was to assess potential temporal and spatial differences in productivity measures of vessels operating in the Queensland spanner crab fishery. This fishery’s logbook records of catch and effort data allowed analysis of the impact of fishery management changes on productivity measures. Data envelopment analysis (DEA) with a ‘window analysis’ approach was used to derive estimates for measures of technical efficiency, capacity utilisation and scale efficiency over time for five different spanner crab fishing regions. The results suggest that average technical efficiency and capacity utilisation were relatively low over time and across fishing regions, implying a high level of technical inefficiency and the existence of excess capacity in the fishery. Scale efficiency was found to be high historically but decreased slightly since 2006 for all regions. The results suggest that this decline is likely not caused by the fishery management changes, but instead is due to other factors. Additional data (e.g., revenue, profit, costs, skipper experience) and analysis is needed to assess the causes for the low technical efficiency and capacity utilisation and reasons for the decrease in scale efficiency as a baseline for specific fishery management recommendations. The study shows that temporal and spatial efficiency and productivity analysis of fisheries can help identify potential issues that are not otherwise apparent.

Integrating Assessment of Characterization, Sustainability and Efficiency for the Production of Rainbow Trout (Oncorhynchus mykiss): A Case Study in the Amazonas Region of Peru

In this research, aspects of sustainability and efficiency were evaluated to provide information to decision makers. First, 39 rainbow trout farms were characterized, sustainability indices were determined for 36 production units using Sarandon’s methodology, and technical efficiency was evaluated using input-oriented Data Envelopment Analysis (DEA). The production units studied were grouped into three clusters, and the most determining variables were associated with total annual production. In addition, a medium-level general index was obtained with a total of 60 sub-indicators, divided into four social indicators (with 10 sub-indicators), four economic indicators (with 34 sub-indicators) and three environmental indicators (totaling 16 sub-indicators). Of 33 production units evaluated, 14 were identified as efficient; the Amazonas region’s trout farmers were found to operate at 83.87% technical efficiency on average. All resources showed room for improvement and thus can be further adjusted. The most underutilized resources were land (area), feed and seed (fry), which could be reduced to increase technical efficiency. In conclusion, the trout farming units in northeastern Peru are differentiated into three groups by production volume and operate at a medium level of sustainability, with most at levels of technical inefficiency.

EFISIENSI PENGGUNANFAKTOR-FAKTOR PRODUKSI PADA USAHA PEMBESARAN IKAN NILA (Oreochromis niloticus)

The use of production factors (ponds, seeds, organic fertilizers, lime, feed and labor) in tilapia growing business is a factor that plays an important role in determining the level of efficiency. This study aims to determine and analyze the efficiency of the use of production factors in tilapia enlargement business, namely technical efficiency, factors that affect the level of technical inefficiency, allocative and economic efficiency. The research method uses a survey method. The determination of the research location was carried out purposively in the City of Tasikmalaya. Determination of samples taken from a population of 314 people using the proportional random sampling method obtained 76 cultivators of tilapia enlargement business. The research was conducted from March to July 2022. Data were analyzed using the stochastic frontier production function model and the dual frontier cost function using Frontier 4.1 software. The results showed that the use of production factors in tilapia rearing business was not efficient with an average technical efficiency level of 0.68 and the factors influencing technical inefficiency were business experience and the number of family dependents; the average allocative efficiency level is 0.76; and the average economic efficiency of 0.53

Production Efficiency Measurement of Seaweed Cultivation In The Specific Economic Zone of Mandalika, Central Lombok Regency

Central Lombok Regency, especially in the Specific Economic Zone (SEZ) Mandalika apart from being a tourism area it is also one of the centers for seaweed cultivation in NTB Province, seaweed cultivation in the SEZ Mandalika, Central Lombok Regency currently still has several problems, one of which is business productivity which is still low. The low productivity of seaweed cultivation can be caused by inefficient allocation of inputs. The aims of this study were: 1) to analyze the factors that affect the production of seaweed aquaculture, 2) to analyze the level of efficiency of the production of seaweed aquaculture, and 3) to analyze the factors that influence the level of technical inefficiency of seaweed cultivation in SEZ Mandalika, Central Lombok Regency. This study uses a descriptive research method with a mixed method research approach. Collecting research data using survey techniques through interviews with respondents as many as 30 people who were taken by accidental sampling. Analysis of the data in this study using the method of Cobb-Douglas stochastic frontier production function to measure the level of production efficiency of seaweed cultivation in SEZ Mandalika, Central Lombok Regency. The results of this study indicate that seaweed production is significantly influenced by the variables of area, seeds, and labour. The level of production efficiency of seaweed cultivation is efficient with a production efficiency value of 0.861. Then the factors that affect the technical inefficiency of seaweed cultivation in Central Lombok Regency include level of education and dummy farmer groups.

Mismeasurement and efficiency estimates: Evidence from smallholder survey data in Africa

AbstractSmallholder agriculture in sub‐Saharan Africa is commonly characterised by high levels of technical inefficiency. However, much of this characterisation relies on self‐reported input and production data, which are prone to systematic measurement error. We show theoretically that non‐classical measurement error introduces multiple identification challenges and sources of bias in estimating smallholders' technical inefficiency. We then empirically examine the implications of measurement error for the estimation of technical inefficiency using smallholder farm survey data from Ethiopia, Malawi, Nigeria and Tanzania. We find that measurement error in agricultural input and production data leads to a substantial upward bias in technical inefficiency estimates (by up to 85% for some farmers). Our results suggest that existing estimates of technical efficiency in sub‐Saharan Africa may be severe underestimates of smallholders' actual efficiency and what is commonly attributed to farmer inefficiency may be an artefact of mismeasurement in agricultural data. Our results raise questions about the received wisdom on African smallholders' production efficiency and prior estimates of the productivity of agricultural inputs. Improving the measurement of agricultural data can improve our understanding of smallholders' production efficiencies and improve the targeting of productivity‐enhancing technologies.

English

A key constraint to smallholder cassava production systems in Africa is the cassava whitefly pest species. These pests are a group of several cryptic species within Bemisia tabaci that cause direct damage to cassava and vector viruses that cause disease. We employ a farm-level stochastic production frontier (SPF) model to determine the impacts of the cassava whitefly pests on the productivity and technical efficiency (TE) of smallholder cassava farmers in Malawi, Tanzania, and Uganda. Primary data were collected from a sample of cassava farmers using a structured survey questionnaire. A total of 1200 farmers were selected from Malawi (400), Tanzania (350) and Uganda (450), and interviewed using a multi-stage sampling technique. Cassava output was significantly correlated with land area, the quantity of cuttings used to propagate the crop, and total labor used. We found that whitefly infestations as well as several socio-economic factors significantly affected the technical inefficiency of cassava farmers. Whitefly and disease infestations contributed to higher levels of technical inefficiency of cassava farmers. The mean TE score was significantly lower (50%) for cassava farms with whitefly infestation compared to those without any infestation (80%). These findings underscore the need for policies to ensure that cassava farmers have better access to improved inputs, especially clean planting materials, and the knowledge to integrate this technology into their farming system effectively. Key words: Cassava, productivity, smallholder, whitefly pest.&nbsp

Substituting Organic Fertilizer for Chemical Fertilizer: Evidence from Apple Growers in China

This study investigates the key factors affecting farmers’ decisions to use chemical fertilizer and/or organic fertilizer in Chinese apple production. This study calculates partial output elasticities and elasticities of the substitution between organic and chemical fertilizer, using a stochastic frontier production function model and data for 2017–2019. Subsequently, it analyzes how different sales channels impact the partial output elasticities of organic fertilizer. It also examines the impact of economic incentives on organic fertilizer use and technical inefficiency levels in apple production. The empirical results indicate that the organic matter in organic fertilizer has a medium level of substitutability with nitrogen, phosphorus, and potassium in chemical fertilizer. Further, the results indicate that an increase in the total number of available sales channels incentivizes farms to use more organic fertilizer to optimize apple quantity at the expense of the quality. Contrary, the use of any of the three most commonly used sales channels among apple growers (dealer door-to-door purchases, enterprise sales for juice pressing, and apple brokers) has the opposite effect on the use of organic fertilizer. From these findings, the subsidized provision of organic fertilizer and educating apple farmers about the economic and ecological benefits of sustainable land management measures are suggested. Finally, the study suggests measures to improve farmers’ income, sustainable land management, and lowering the footprint of chemical fertilizers in apple production in China.

Degraded pastures in Brazil: improving livestock production and forest restoration.

Degraded pasture is a major liability in Brazilian agriculture, but restoration and recovery efforts could turn this area into a new frontier to both agricultural yield expansion and forest restoration. Currently, rural properties with larger degraded pasture areas are associated with higher levels of technical inefficiency in Brazil. The recovery of 12 million ha of degraded pastures could generate an additional production of 17.7 million bovines while reducing the need for new agricultural land. Regional identification of degraded pastures would facilitate the targeting of agricultural extension and advisory services and rural credit efforts aimed at fostering pasture recovery. Since only 1% of Brazilian municipalities contain 25% of degraded pastures, focusing pasture recovery efforts on this small group of municipalities could generate considerable benefits. More efficient allocation of degraded and native pastures for meat production and forest restoration could provide land enough to fully comply with its Forest Code requirements, while adding 9 million heads to the cattle inventory. Degraded pasture recovery and restoration is a win–win strategy that could boost livestock husbandry and avoid deforestation in Brazil and has to be the priority strategy of agribusiness sector.

ANALYSIS OF EFFICIENCY OF TECHNICAL AND FACTORS AFFECTING IN AROMATIC RICE FARMING IN THE SELUMA REGENCY

The research objective is to determine the level of technical efficiency and the factors that influence the level of technical inefficiency, to analyze the relationship between input and output in the production process of aromatic rice farming in Seluma regency.Total number of respondents were 73 farmers who planted Aromatic rice. The Cobb Douglass of Frontier Stochastic approach was used, whereas for the factors that influence the inefficiency function as the initial answer of the above analysis results of the production function parameter were obtained through the Maximum Likelihood Estimation (MLE), with an LR value of 14.3620 which was higher than t table 99% (2.39). It had a significant effect on the 99% confidence level. It was seem that, there was no meaning that all aromatic rice farmers in the regency were 100% efficient. It could be seen that the MLE log-likelihood value of 29.9157 was higher than the OLS log-likelihood value of 22.7347. The lowest technical efficiency value was achieved by the farmers by 0.55 and the highest by 0.97. In the research area, the majority of the use of production factors was efficient, from 73.34% already in the value of efficiency between 0.90-1.00, meaning that 73.34% had approached the maximum efficiency. The result of the disseminated coefficient (R2) of 0.277 could mean a significant effect of 27.7 percent on the inefficiency variable while the remaining 72.3 percent is influenced by other factors not included in this research variable.

A Stochastic Frontier Approach to Measuring Inefficiency of Local Communities in Bosnia and Herzegovina

AbstractThe significance and methods of measuring inefficiency of local communities has been gaining prominence in the last decade. The purpose of this paper is to empirically investigate the level of technical inefficiency in the sample of local communities in Bosnia and Herzegovina (BiH) for the year of 2017. We implement parametric stochastic frontier analysis (SFA) to conduct an input-oriented stochastic parametric approach to measuring technical inefficiency of local communities in BiH. The results of our work are complementary to previous research indicating relative technical inefficiency of local communities in BiH. On average, BiH local communities’ total expenditures can be reduced by 46.8 percent without reducing output levels to achieve the result of the local community on the best practice frontier. Since our analysis and selection of variables are driven by data availability, the future research plans to include more variables.

Does directed technological change favor energy? Firm-level evidence from Portugal

Economic performance is closely related with energy consumption, the major part of which still comes from non-renewable sources. While endeavoring to promote renewable energy, policy makers are interested in technological change that also increases energy efficiency. However, both growth models of directed technological change and microeconomic theories regarding innovation suggest that technological change is not necessarily biased towards energy. In order to investigate directed technological change at the micro level, this paper applies stochastic frontier analysis to firm data for 32 economic subsectors, with respect to output produced with four inputs: capital, labor, electricity and fuel. Subsectors demonstrate different levels of technical inefficiency, which could be induced by capital deepening and higher share of financial income in total revenue. Output elasticity of labor is generally high among the subsectors, emphasizing labor as the main driver for economic growth. Output elasticity of capital is low overall, although a few subsectors enjoy better marginal returns. In most subsectors, technological change is biased the most towards labor; between electricity and fuel, technological change has favored fuel in more cases. We infer that the market size effect is likely to overwhelm others in deciding the direction of technological change. Thus, policy should include tools in addition to the energy price in order to induce technological change.

Technical Efficiency and Agglomeration Economies in the Hotel Industry: Evidence from Canary Islands

This paper aims to estimate the level of technical inefficiency in the hotel sector of a major tourist destination of Europe, the Canary Islands, exploring the relevance of agglomeration processes in efficiency levels. To do this, a complete dataset of the hotel supply for the period 2010–2016 is used. A translog production frontier and an inefficiency function are estimated in a single-stage sampling procedure. Results suggest an aggregate technical inefficiency of approximately 32%. Furthermore, technical efficiency seems to be decreasing with market concentration and congestion, and increasing in agglomeration economies.

Technical Efficiency of Wheat Producers in North Shewa Zone of Amhara Region, Central Ethiopia

The aim of this study is to analyze technical efficiency of wheat producers and identifying the sources of inefficiency in North Shewa Zone of Amhara National Region State, Central Ethiopia. A multi-stage sampling technique was used to select sample respondent households. In the first phase, three potential wheat grower districts namely, Bassona Worrana, Siyadebrna Wayu, and Moretna Jiru were selected purposively. In the second stage, six potential kebeles (lowest administrative level), two from each of the three districts were selected. In the third phase, proportionally with population size, 374 sample households were selected using simple random sampling techniques from each of the selected kebeles. Cobb-Douglas Stochastic Frontier Production (SFP) function and inefficiency function were used to estimate the technical inefficiency level of wheat producers using a one-step maximum likelihood estimation procedure. The average productivity of wheat was found to be 32.60 quintals per hectare. Land size, fertilizer, seed, labor, and oxen power were important factors of production positively and significantly affecting wheat output. Age and education level of a farmer, off-farm income, extension contact, and credit services were found negatively and significantly affecting the technical inefficiency of wheat producing farmers. The inefficiency components contributed about 70.62% of the total deviation from the best possible production output. The average technical efficiency (TE) level of wheat producers was 72%. Overall, the provision of fertilizers, credit, and extension services would make wheat producers more productive and technically efficient in the study area.

Analysis of the dynamic electricity revenue inefficiencies of Taiwan’s municipal solid waste incineration plants using data envelopment analysis

Due to insufficient land and energy resources, municipal solid waste incineration plants are used in many countries as a means of addressing the growing volumes of generated municipal solid waste and to recover energy resources. Taiwan's government allows the private sector to offer municipal solid waste treatment services and electricity to the public. Revenue from the sale of electricity is an important source of income for municipal solid waste incineration plants. Although several studies have examined the technical efficiency of municipal solid waste incineration plants, previous studies have not measured or deconstructed the dynamic electricity revenue inefficiency of incineration plants. For our purposes, this paper presents a data envelopment analysis model that measures and deconstructs the electricity revenue inefficiency while taking into account the slacks and dynamic factors in measuring technical inefficiency levels within the context of assessing MSW incineration plants in Taiwan. This study applied the proposed model to analyze the electricity revenue inefficiency of the municipal solid waste incineration plants in Taiwan over the period of 2013–2018. In this study, we found that the main source of electricity revenue inefficiency is the technical waste from electricity production. Our empirical analysis reveals that the electricity technical, revenue and allocative efficiencies of public plants are lower than those of private plants.

Estimation of technical efficiency of black cumin (Nigella sativa L.) farming in northwest Ethiopia: a stochastic frontier approach

Ethiopia is one of the east African countries which produce and exports various spices to other countries. Black cumin (Nigella sativa L.) is an important stiff annual flowering plant which mainly grows by producers for its seeds. An increasing demand of black cumin seed and oil in local, national and international market for medicinal, consumption and commercial purpose makes the best alternative crop for small holder farmers in Ethiopia. In spite of its importance, not much has been done to improve its production and productivity in Ethiopia. Therefore, this research was designed to examining efficiency variations and factors influencing technical inefficiency levels of producers on black cumin production in northwest Ethiopia. Primary data were collected using a semi-structured questionnaire administered on 188 black cumin producers selected using systematic random sampling technique. Moreover, various data analysis methods such as descriptive statistics and stochastic frontier model were used for analyzing the data. The empirical result obtained by applying maximum likelihood estimate of stochastic frontier model revealed that seed (p < 0.01) labor (p < 0.05), chemical (p < 0.01) and land (p < 0.05) were significant input variables in determining black cumin production. The mean technical efficiency level of black cumin producer was generally low, about 53.1%. The mean value of actual yield, potential yield and yield gap was 3.131, 5.832 and 2.701 quintals, respectively. Moreover, the result of stochastic frontier model together with the inefficiency parameters revealed that market price of black cumin (p < 0.01) and access of extension service (p < 0.1) were significant variables and positively influenced the efficiency levels of black cumin producers. Whereas age of producers (p < 0.05) and distance to farm plot (p < 0.01) negatively influenced the technical efficiency levels of black cumin producers. Therefore, the study recommends that adoption of latest agricultural technologies; development of institutions, agricultural extension services and infrastructure are advisable to improve the efficiency and commercial value of black cumin production.