IDEAS home Printed from https://ideas.repec.org/a/pid/journl/v37y1998i3p275-291.html
   My bibliography  Save this article

Stochastic Frontier and Technical Efficiency of Farms in Irrigated Areas of Pakistan's Punjab

Author

Listed:
  • Abid A. Burki

    (Department of Economics, Quaid-i-Azam University, Islamabad.)

  • Haq Nawaz Shah

    (Punjab Economic Research Institute, Lahore.)

Abstract

This paper presents new evidence on technical efficiency and its sources by examining the cost behaviour of 387 farms and whole-farm data from five irrigated districts of Punjab. Fitting translog variable cost frontier we find that technical inefficiency raises the cost of average sample farms by 24 percent that could have been saved had the farms been technically efficient. Our results enable us to conclude that farm efficiency is positively related to formal schooling of farm operators, abundance of canal water, and head reaches of mogha, and negatively to farm size, while the age of farm operators has no effect on efficiency.

Suggested Citation

  • Abid A. Burki & Haq Nawaz Shah, 1998. "Stochastic Frontier and Technical Efficiency of Farms in Irrigated Areas of Pakistan's Punjab," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 37(3), pages 275-291.
    • Handle: RePEc:pid:journl:v:37:y:1998:i:3:p:275-291
    as

    Download full text from publisher

    File URL: http://www.pide.org.pk/pdf/PDR/1998/Volume3/275-291.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Greene, William H., 1982. "Maximum likelihood estimation of stochastic frontier production models," Journal of Econometrics, Elsevier, vol. 18(2), pages 285-289, February.
    2. Byerlee, Derek & Siddiq, Akmal, 1994. "Has the green revolution been sustained? The quantitative impact of the seed-fertilizer revolution in Pakistan revisited," World Development, Elsevier, vol. 22(9), pages 1345-1361, September.
    3. Fare,Rolf & Grosskopf,Shawna & Lovell,C. A. Knox, 2008. "Production Frontiers," Cambridge Books, Cambridge University Press, number 9780521072069, September.
    4. Bravo-Ureta, Boris E. & Pinheiro, António E., 1993. "Efficiency Analysis of Developing Country Agriculture: A Review of the Frontier Function Literature," Agricultural and Resource Economics Review, Cambridge University Press, vol. 22(1), pages 88-101, April.
    5. Burki, Abid A. & Terrell, Dek, 1998. "Measuring production efficiency of small firms in Pakistan," World Development, Elsevier, vol. 26(1), pages 155-169, January.
    6. A. Parikh & K. Shah, 1994. "Measurement Of Technical Efficiency In The North‐West Frontier Province Of Pakistan," Journal of Agricultural Economics, Wiley Blackwell, vol. 45(1), pages 132-138, January.
    7. Kalaitzandonakes, Nicholas G. & Dunn, Elizabeth G., 1995. "Technical Efficiency, Managerial Ability And Farmer Education In Guatemalan Corn Production: A Latent Variable Analysis," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 24(1), pages 1-11, April.
    8. Jondrow, James & Knox Lovell, C. A. & Materov, Ivan S. & Schmidt, Peter, 1982. "On the estimation of technical inefficiency in the stochastic frontier production function model," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 233-238, August.
    9. Kalaitzandonakes, N.G. & Dunn, E.G., 1995. "Technical Efficiency, Managerial Ability and Farmer Education in Guatemalan Corn Production: A Latent Variable Analysis," Agricultural and Resource Economics Review, Cambridge University Press, vol. 24(1), pages 36-46, April.
    10. Meeusen, Wim & van den Broeck, Julien, 1977. "Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 435-444, June.
    11. George E. Battese & Sohail J. Malik & Sumiter Broca, 1993. "Production Functions for Wheat Farmers in Selected Districts of Pakistan: An Application of a Stochastic Frontier Production Function with Time-varying Inefficiency Effects," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 32(3), pages 233-268.
    12. Cornwell, C. & Schmidt, P., 1993. "Production Frontiers and Efficiency Measurement," Papers 427e, Georgia - College of Business Administration, Department of Economics.
    13. Panda, Rajkishor, 1986. "Anomaly in the Use of Water in a Canal Irrigation System - A Case Study," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 41(4), October.
    14. Phillips, Joseph M, 1994. "Farmer Education and Farmer Efficiency: A Meta-Analysis," Economic Development and Cultural Change, University of Chicago Press, vol. 43(1), pages 149-165, October.
    15. Ashok PARIKH & Mir Kalan SHAH, 1996. "Various Approaches To Measurement Of Technical Efficiency In North-West Frontier Province Of Pakistan," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 12(1), pages 31-65.
    16. Azhar, Rauf A, 1991. "Education and Technical Efficiency during the Green Revolution in Pakistan," Economic Development and Cultural Change, University of Chicago Press, vol. 39(3), pages 651-665, April.
    17. Bauer, Paul W., 1990. "Recent developments in the econometric estimation of frontiers," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 39-56.
    18. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    19. Fane, George, 1975. "Education and the Managerial Efficiency of Farmers," The Review of Economics and Statistics, MIT Press, vol. 57(4), pages 452-461, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Muhammad Irfan, 2010. "A Review of the Labour Market Research at PIDE 1957-2009," PIDE Books, Pakistan Institute of Development Economics, number 2010:1 edited by Rashid Amjad & Aurangzeb A. Hashmi.
    2. Umar Farooq & Trevor Young & Noel Russell & Muhammad Iqbal, 2001. "The supply response of basmati rice growers in Punjab, Pakistan: price and non-price determinants," Journal of International Development, John Wiley & Sons, Ltd., vol. 13(2), pages 227-237.
    3. Karunarathna, Muditha & Wilson, Clevo, 2017. "Agricultural biodiversity and farm level technical efficiency: An empirical investigation," Journal of Forest Economics, Elsevier, vol. 29(PA), pages 38-46.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Thiam, Abdourahmane & Bravo-Ureta, Boris E. & Rivas, Teodoro E., 2001. "Technical efficiency in developing country agriculture: a meta-analysis," Agricultural Economics, Blackwell, vol. 25(2-3), pages 235-243, September.
    2. Tim J. Coelli, 1995. "Recent Developments In Frontier Modelling And Efficiency Measurement," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 39(3), pages 219-245, December.
    3. Abdul Wadud, 2013. "Impact of Microcredit on Agricultural Farm Performance and Food Security in Bangladesh," Working Papers 14, Institute of Microfinance (InM).
    4. Coelli, Tim J. & Battese, George E., 1996. "Identification Of Factors Which Influence The Technical Inefficiency Of Indian Farmers," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 40(2), pages 1-26, August.
    5. Khem Sharma & Pingsun Leung & Halina Zaleski, 1997. "Productive Efficiency of the Swine Industry in Hawaii: Stochastic Frontier vs. Data Envelopment Analysis," Journal of Productivity Analysis, Springer, vol. 8(4), pages 447-459, November.
    6. Madau, Fabio A., 2012. "Technical and scale efficiency in the Italian Citrus Farming: A comparison between Stochastic Frontier Analysis (SFA) and Data Envelopment Analysis(DEA) Models," MPRA Paper 41403, University Library of Munich, Germany.
    7. Alene, Arega D. & Manyong, Victor M. & Gockowski, James, 2006. "The production efficiency of intercropping annual and perennial crops in southern Ethiopia: A comparison of distance functions and production frontiers," Agricultural Systems, Elsevier, vol. 91(1-2), pages 51-70, November.
    8. Henderson, Benjamin B. & Kingwell, Ross S., 2001. "An Investigation of the Technical and Allocative Efficiency of Broadacre Farmers," 2002 Conference (46th), February 13-15, 2002, Canberra, Australia 125109, Australian Agricultural and Resource Economics Society.
    9. Phu Nguyen-Van & Nguyen To-The, 2016. "Technical efficiency and agricultural policy: evidence from the teaproduction in Vietnam," Review of Agricultural, Food and Environmental Studies, INRA Department of Economics, vol. 97(3), pages 173-184.
    10. Madau, Fabio A., 2005. "Technical Efficiency in Organic Farming: An Application on Italian Cereal Farms Using a Parametric Approach," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24545, European Association of Agricultural Economists.
    11. Sirak Bahta & Amos Omore & Darek Baker & Iheanacho Okike & Berhanu Gebremedhin & Francis Wanyoike, 0. "An Analysis of Technical Efficiency in the Presence of Developments Toward Commercialization: Evidence from Tanzania’s Milk Producers," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 0, pages 1-24.
    12. Phu Nguyen-Van & Nguyen To-The, 2014. "Agricultural extension and technical efficiency of tea production in northeastern Vietnam," Working Papers of BETA 2014-11, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    13. Gian Carlo Scarsi, 1999. "Local Electricity Distribution in Italy: Comparative Efficiency Analysis and Methodological Cross-Checking," Working Papers 1999.16, Fondazione Eni Enrico Mattei.
    14. A. M. Theodoridis & A. Psychoudakis, 2008. "Efficiency Measurement in Greek Dairy Farms: Stochastic Frontier vs. Data Envelopment Analysis," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Democritus University of Thrace (DUTH), Kavala Campus, Greece, vol. 1(2), pages 53-67, December.
    15. Léopold Simar & Paul W. Wilson, 2023. "Nonparametric, Stochastic Frontier Models with Multiple Inputs and Outputs," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 41(4), pages 1391-1403, October.
    16. Martín Rossi, 2015. "The Econometrics Approach to the Measurement of Efficiency: A Survey," Working Papers 117, Universidad de San Andres, Departamento de Economia, revised Feb 2015.
    17. Sirak Bahta & Amos Omore & Darek Baker & Iheanacho Okike & Berhanu Gebremedhin & Francis Wanyoike, 2021. "An Analysis of Technical Efficiency in the Presence of Developments Toward Commercialization: Evidence from Tanzania’s Milk Producers," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 33(3), pages 502-525, June.
    18. Luis R. Murillo‐Zamorano, 2004. "Economic Efficiency and Frontier Techniques," Journal of Economic Surveys, Wiley Blackwell, vol. 18(1), pages 33-77, February.
    19. Kashiwagi, Kenichi & Mtimet, Nadhem & Zaibet, Lokman & Nagaki, Masakazu, 2010. "Technical efficiency of olive oil manufacturing and efficacy of modernization programme in Tunisia," 2010 AAAE Third Conference/AEASA 48th Conference, September 19-23, 2010, Cape Town, South Africa 96195, African Association of Agricultural Economists (AAAE).
    20. William C. Horrace & Peter Schmidt, 2002. "Confidence Statements for Efficiency Estimates from Stochastic Frontier Models," Econometrics 0206006, University Library of Munich, Germany.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pid:journl:v:37:y:1998:i:3:p:275-291. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Khurram Iqbal (email available below). General contact details of provider: https://edirc.repec.org/data/pideipk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.