An Analysis of Allocative Efficiency of Wheat Growers in Northern Pakistan

Restricted translog production model is used to estimate the allocative efficiency of wheat growers in Peshawar Valley. It is found that average allocative efficiency is 72 percent. To increase the allocative efficiency, farmers need to increase the use of nitrogen and phosphorous and decrease the use of tillage and irrigation.

Assessing the Technical and Allocative Efficiency of Marketing Decisions by U.S. Organic Producers

We develop measures of technical and allocative efficiency of producers in marketing certified organic products. A stochastic output distance frontier and the associated revenue share equations are estimated using comprehensive U.S. data on certified organic producers. Farm-level measures of technical efficiency are calculated and factors which enhance performance are identified. Factors that systematically influence allocative efficiency are assessed. The revenue mix of organic producers is systematically inefficient as both male and female producers rely too heavily on revenue from organic markets relative to conventional outlets.organic farming, stochastic frontier, technical efficiency, allocative efficiency, Farm Management, Marketing, D21, C31, Q01,

Technological change, technical and allocative efficiency in Chinese agriculture: the case of rice production in Jiangsu

This paper develops a frontier shadow cost function approach to estimate empirically the effects of technological change, technical and allocative efficiency improvement in Chinese agriculture during the reform period (1980-93). The results reveal that the first phase rural reforms (1979-84) which focused on the decentralization of the production system have had significant impact on technical efficiency but not allocative efficiency. During the second phase reforms which was supposed to focus on the liberalization of rural markets, technical efficiency improved very little and allocative efficiency has increased only slightly, however. In contrast, the rate of technological change continued to increase, although at a declining rate during the second phase reform.Rice production., Technological innovations China.,

Allocative Efficiency among Fadama Fluted Pumkin Farmers in Imo State, Nigeria

The study investigated the allocative efficiency among Fadama Fluted pumpkin farmers in Imo State, Nigeria. It specifically sought to analyze the Farmers’ socio-economic profile; estimate their allocative efficiency as well as its determinants. A multistage random sample of 120 Fadama Fluted Pumpkin farmers drawn from the three agricultural zones of the state was employed. A structured questionnaire was used to obtain information on socio-economic characteristics and other relevant variables. Allocative efficiency was deduced from the quotient between economic efficiency and technical efficiency scores and regressed against farm specific factors. The t-test statistic was employed in testing determinants of allocative efficiency. The descriptive statistical results showed that majority of the farmers are active small holders and literate with many years of farming experience. The enterprise was female dominated while household was large. The maximum likelihood estimation of the translog model revealed that allocative efficiency was influenced by education, farming experience, extension contact, credit access and household size. Given the mean allocative efficiency of 0.62, about 51.67% of the respondents are frontier farmers. Also, the average Fadama Fluted pumpkin farmer would require a cost savings of 37.37% in order to attain the status of the most allocative efficient producer. As more opportunities exist for improvement of allocative efficiency by the Fadama Farmers, the need to intensify the current family planning programme in Nigeria as well as eliminate extended bureaucratic processes associated with credit access cannot be over emphasized.Fadama, Fluted Pumpkin, Allocative Efficiency

Technical, Allocative, and Economic Efficiency in Swedish Dairy Farms: The Data Envelopment Analysis Versus the Stochastic Frontier Approach

Technical, allocative, and economic input efficiency scores were estimated for an unbalanced panel of Swedish dairy farms, using data envelopment analysis (DEA) and the stochastic frontier approach (SFA). By comparing the results it was concluded that when the entire dairy farm is studied the DEA is more appropriate to use since it does not require any particular parametric form to be chosen. The average DEA technical, allocative and economic efficiency indices were eventually found to be 0.77, 0.57, and 0.43 respectively. The influence of size on the efficiency scores was analyzed and significant evidence indicating a positive relationship between size and efficiency was found. Finally it was concluded that the main challenge facing the Swedish dairy farms is to enhance their cost minimizing skills.technical efficiency, allocative efficiency, economic efficiency, data envelopment analysis, stochastic frontier approach, Livestock Production/Industries, C14, C23, C24,

Allocative efficiency measurement revisited: Do we really need input prices?

The traditional approach to measuring allocative efficiency is based on input prices, which are rarely known at the firm level. This paper proposes a new approach to measure allocative efficiency which is based on the output-oriented distance to the frontier in a profit?technical efficiency space-and which does not require information on input prices. To validate the new approach, we perform a Monte-Carlo experiment which provides evidence that the estimates of the new and the traditional approach are highly correlated. Finally, as an illustration, we apply the new approach to a sample of about 900 enterprises from the chemical industry in Germany. --allocative efficiency,data envelopment analysis,frontier analysis,technical efficiency,Monte-Carlo study,chemical industry

Allocative efficiency measurement revisited: do we really need input prices?

The traditional approach to measuring allocative efficiency is based on input prices, which are rarely known at the firm level. This paper proposes a new approach to measure allocative efficiency which is based on the output-oriented distance to the frontier in a profit - technical efficiency space - and which does not require information on input prices. To validate the new approach, we perform a Monte-Carlo experiment which provides evidence that the estimates of the new and the traditional approach are highly correlated. Finally, as an illustration, we apply the new approach to a sample of about 900 enterprises from the chemical industry in Germany. --Allocative efficiency,data envelopment analysis,frontier analysis,technical efficiency,Monte-Carlo study,chemical industry

Assessing the Technical and Allocative Efficiency of U.S. Organic Producers

We develop measures of technical and allocative efficiency of producers in marketing certified organic products. A stochastic output distance frontier and the associated revenue share equations are estimated using comprehensive U.S. data on certified organic producers. Farm-level measures of technical efficiency are calculated and factors that enhance performance are identified. Factors that systematically influence allocative efficiency are assessed. The revenue mix of organic producers is systematically inefficient as both male and female producers rely too heavily on revenue from organic markets relative to conventional outlets.organic farming, stochastic frontier, technical and allocative efficiency, Agribusiness, Farm Management, Marketing, Production Economics, Productivity Analysis, Public Economics, D21, C31, Q01,

Allocative Efficiency of Small-Holder Cocoyam Farmers in Anambra State, Nigeria

This study employed a stochastic frontier translog cost and production functions to measure the level of allocative efficiency and it’s determinants in small-holder cocoyam production in Anambra state, Nigeria. A multi-stage random sampling technique was used to select 120 cocoyam farmers in the state in 2005 from whom input-output data and their prices were obtained using the cost-route approach. The parameters of the stochastic frontier cost function were estimated using the maximum likelihood method. The result of the analysis shows that individual farm level allocative efficiency was about 65%. The study found age and education to be negatively and significantly related to allocative efficiency at 1.0%. Farm size coefficient also had a negative relationship with allocative efficiency and was significant at 5.0%. Fertilizer use and credit access was significant and directly related to allocative efficiency at 5.0% as well as farm experience at 10.0% level of probability. No significant relationship was found between allocative efficiency and extension visit, family size and membership of cooperative societies.Translog Stochastic Frontier Production Function, Technical Efficiency, Economic Efficiency and Allocative Efficiency

Estimation of Technical and Allocative Inefficiencies in a Cost System: An Exact Maximum Likelihood Approach

Estimation and decomposition of overall (economic) efficiency into technical and allocative components goes back to Farrell (1957). However, in a cross-sectional framework joint econometric estimation of efficiency components has been mostly confined to restrictive production function models (such as the Cobb-Douglas). In this paper we implement a maximum likelihood (ML) procedure to estimate technical and allocative inefficiency using the dual cost system (cost function and the derivative conditions) in the presence of cross-sectional data. Specifically, the ML procedure is used to estimate simultaneously the translog cost system and cost increase due to both technical and allocative inefficiency. This solves the so-called ‘Greene problem’ in the efficiency literature. The proposed technique is applied to the Christensen and Greene (1976) data on U.S. electric utilities, and a cross-section of the Brynjolfsson and Hitt (2003) data on large U.S. firms.Technical inefficiency, allocative inefficiency, the Greene problem, translog cost function