Production Functions for Wheat Farmers in Selected Districts of Pakistan: An Application of a Stochastic Frontier Production Function with Time-varying Inefficiency Effects

Abstract

Two models of technical inefficiency with a stochastic production frontier are considered in this paper. In the frrst model, it is assumed that the frontier itself does not vary with time, while in the second, the frontier is allowed to move. These models are applied to four years of panel data on wheat farmers in four districts of Pakistan: Faisalabad and Attock in the Punjab, Badin in Sindh, and Dir in the NWFP. Using essentially the same stochastic frontier production function in each of the four districts involved, different stochastic specifications for the inefficiency effects are obtained for the different districts. Technical efficiencies of production of the individual farmers are predicted in each year in which they are observed. Varying patterns of technical inefficiency are observed. The null hypothesis (of no technical inefficiency) cannot be rejected in only one district. In the other districts, while inefficiencies appear to be present in all of them, they are declining at a fairly rapid pace in one. The results highlight the importance of analysis at a disaggregated level because it is clear that both the rate of technical change and relative efficiencies vary across regions and explicit cognisance must be taken of this both in research and policy formulation.

Agricultural Productivity Growth Differential in Punjab, Pakistan: A District-level Analysis

“…8 There are 13 observations in the data where non-irrigated area is zero. To account for zero observations in the Cobb-Douglas functional form, the following procedure is adopted: in Equation 10, the UNIRR variable is transformed into log form when UNIRR>0, while zero's are taken as such, and an additional variable is D un is created assuming value of 1 when the UNIRR is equal to zero and takes zero value if the UNIRR is positive [Battese et al (1993); Battese (1996) and Battese (1997)]. Applications can also be found in Ahmad and Qureshi (1999), and in Ahmad, Chaudhry, and Chaudhry (2000).…”

Participation in Organizations, Technical Efficiency and Territorial Differences: A Study of Small Wheat Farmers in Chile

“…Similarly, Tian and Wan (2000) analyzed the determinants of technical efficiency associated to rice, wheat (Triticum aestivum L.) and maize (Zea mays L.) production in China, finding evidence of a positive relation between education and efficiency in the case of wheat and maize and a direct relation with farm size and the adoption of a multiple crop system in the case of rice production. More information on wheat crop efficiency can be found in Battese et al (1993), Battese and Broca (1997), Giannakas et al (2001) and Ahmad et al (2002).…”

Technical efficiency and metatechnology ratios for dairy farms in three southern cone countries: a stochastic meta-frontier model

“…For instance, Battese et al (1993) estimated TE for wheat farms in selected districts of Pakistan. Their estimations were based on different stochastic production frontiers (SPF) for each district without testing if all districts used the same technology.…”