A Note on Theory of Productive Efficiency and Stochastic Frontier Models

Kokkinou, Aikaterini

doi:10.35808/ersj/302

Cited by 8 publications

(7 citation statements)

References 22 publications

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“…The neo classical theory of production and production efficiency seems more suitable when the MFIs are assumed as productive units (such as firms), while they are producing almost same products, working in the same regulatory and environment, using more or less same inputs. Based on the assumptions of neoclassical economists, producers always operate efficiently in terms of both technical aspects and economic aspects as well [Kokkinou (2010)]. For example, technical efficiency means optimisation by not wasting productive resources while economic efficiency means producers optimise by solving allocation problem involving prices.…”

Section: Theoretical Framework Of the Studymentioning

confidence: 99%

“…There is a fair chance of difference in production even when technology and production environment are almost the same, firms or industries may exhibit different productivity levels due to differences in their production efficiency [Kokkinou (2010)]. Thus, this study attempt to investigate social and financial efficiency of the MFIs under the assumption of constant return to scale (input oriented CCR-model) and variable return to scale (input oriented BCC-model).…”

Section: Theoretical Framework Of the Studymentioning

confidence: 99%

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Social and Financial Efficiency of Microfinance Institutions in Pakistan

Khan¹,

Sulaiman²

2022

pdr

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Financial efficiency and profitability of „for profit‟ institutions have been traditionally measured with the help of financial ratios [Hassan and Sanchez (2009)]. However, financial ratios are inappropriate to investigate the sources of inefficiency, estimate financial or social efficiency with multiple inputs and outputs, and to decompose the sources of efficiency or inefficiency into technical, technological and scale efficiencies or inefficiencies respectively [Hassan and Sanchez (2009)]. Microfinance Institutions (MFIs) are special institutions, which simultaneously consider their social role to uplift the marginalised community members along with their commercial objective to secure self-sustainability. In standard literature this phenomenon is coined MFIs as being „double bottom line” institutions. [Gutierrez-Nieto, Serrano-Cinca, and Mar Molinero (2007); Gutiérrez-Nieto, Serrano-Cinca, and Molinero (2007)]. This simultaneity differentiates MFIs from conventional financial institutions. The achievement of socioeconomic efficiency is indispensable for MFIs to operate independently and on a wider scale. Thus investigation of socioeconomic efficiency of MFIs is important for monitoring and optimal policy implications.

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Section: Theoretical Framework Of the Studymentioning

confidence: 99%

Section: Theoretical Framework Of the Studymentioning

confidence: 99%

Social and Financial Efficiency of Microfinance Institutions in Pakistan

Khan¹,

Sulaiman²

2022

pdr

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“…This study follows the modern economic theory based on the assumption of optimizing behavior for producers both technically and economically (Kokkinou, 2010). Agricultural infrastructure and advanced agricultural production methods are synonymous with farmers who can produce efficiently and increase agricultural income.…”

Section: A Stochastic Frontier Model For Agricultural Income For Farmers With Agricultural Infrastructure (Availability)mentioning

confidence: 99%

Agricultural infrastructure as the driver of emerging farmers’ income in South Africa. A stochastic frontier approach

2020

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A stochastic frontier model was applied to cross-sectional data to examine whether availability and accessibility of agricultural infrastructure for emerging farmers enhance their agricultural income through efficiency gains. Using a stratified sampling approach, the study grouped the farmers into two; those who had agricultural infrastructure and those who did not have it. Through a survey, data collected from a sample of 150 smallholder farmers in the study area were analyzed using the frontier model. The explanatory variables that were statistically significant and which influenced the agricultural income of the emerging farmers in the study area included the following: equipment, social, institutional availability and physical accessibility indices, education, access to agricultural extension services, age of farmers, assistance of household members in farming, membership in farmers’ organizations, and marital status of the farmers. Informed policies aimed at improving the income of smallholder farmers might consider the results of the explanatory variables included in this study.

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“…The lower production level could be associated with a type of production technologies, the efficiency of the production, available institutions and markets, and other management and environment-related factors [5][6][7]. Changes in production technologies can shift production functions towards increased quantity or quality of outputs while maintaining the level of inputs [8].…”

Section: Introductionmentioning

confidence: 99%

Technical Efficiency of Traditional Village Chicken Production in Africa: Entry Points for Sustainable Transformation and Improved Livelihood

Birhanu¹,

Alemayehu

Bruno

et al. 2021

Sustainability

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Increasing poultry product consumption trends have attracted researchers and development practitioners to look for interventions that transform the low-input low-output-based village chicken production to a high yielding production system. However, due to the intricate nature of the production system, there is a dearth of evidence that helps design comprehensive interventions at the smallholder level. Using national-level representative data collected from 3555 village chicken producers in Ethiopia, Nigeria, and Tanzania, this study examines the technical efficiency of village chicken production and investigates the main factors that explain the level of inefficiency. We applied a stochastic frontier analysis to simultaneously quantify the level of technical efficiency and identify factors associated with heterogeneity in inefficiency. We found that the level of technical efficiency is extremely low in the three countries, suggesting enormous opportunities to enhance productivity using available resources. The heterogeneity in technical efficiency is strongly associated with producers’ experience in breed improvements and flock management, limited technical knowledge and skills, limited access to institutions and markets, smaller flock size, gender disparities, and household livelihood orientation. We argue the need to adopt an integrated approach to enhance village producers’ productivity and transform the traditional subsistence-based production system into a commercially oriented semi-intensive production system.

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A Note on Theory of Productive Efficiency and Stochastic Frontier Models

Cited by 8 publications

References 22 publications

Social and Financial Efficiency of Microfinance Institutions in Pakistan

Social and Financial Efficiency of Microfinance Institutions in Pakistan

Agricultural infrastructure as the driver of emerging farmers’ income in South Africa. A stochastic frontier approach

Technical Efficiency of Traditional Village Chicken Production in Africa: Entry Points for Sustainable Transformation and Improved Livelihood

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