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Differences in agricultural returns: an empirical test of efficiency in factor input allocation using Vietnamese data

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  • Martin Linde‐Rahr

Abstract

We study whether rural households in Vietnam allocate their factor inputs efficiently. Factor returns and technical rates of substitution (TRS) between production activities are compared. We estimate two translog production functions and conduct three tests: First we test the equality of bootstrapped returns. Second, we use a bootstrapped t‐test comparing the equality of TRS. Finally, we derive a set of nonlinear restrictions on our estimated parameters, which, if held, would imply that we cannot reject efficiency. The article concentrates on the allocation of factors between the cultivation of the two most important agricultural crops—sugar cane and rice. We cannot reject the possibility that households are efficient in their input allocation. These results are consistent and stable over different estimation techniques and support the assumption of profit maximization.

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  • Martin Linde‐Rahr, 2005. "Differences in agricultural returns: an empirical test of efficiency in factor input allocation using Vietnamese data," Agricultural Economics, International Association of Agricultural Economists, vol. 32(1), pages 35-45, January.
    • Handle: RePEc:bla:agecon:v:32:y:2005:i:1:p:35-45
    DOI: 10.1111/j.0169-5150.2005.00003.x
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    Cited by:

    1. Cyril Bogahawatte & Janaranjana Herath, "undated". "Air Quality and Cement Production: Examining the Implications of Point Source Pollution in Sri Lanka," Working papers 1, The South Asian Network for Development and Environmental Economics.
    2. Dewbre, Joshua, 2010. "Improving resource allocation and incomes in Vietnamese agriculture," IFPRI discussion papers 984, International Food Policy Research Institute (IFPRI).
    3. Chowdhury, Nasima Tanveer, 2010. "The relative efficiency of water use in Bangladesh agriculture," Quarterly Journal of International Agriculture, Humboldt-Universitaat zu Berlin, vol. 49(2), pages 1-18.

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