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Profit Efficiency among Paddy Farmers: A Cobb-Douglas Stochastic Frontier Production Function Analysis

Author

Listed:
  • Yahaya Kaka
  • Mad Nasir Shamsudin
  • Alias Radam
  • Ismail Abd Latif

Abstract

A multiple regression model based on Stochastic Frontier Profit Function which assumed Cobb-Douglass specification form was estimated using a cross-sectional data obtained from a sample of 397 Paddy households via Multi-stage and simple random sampling techniques. Maximum likelihood estimates of the specified profit model revealed that profit efficiencies of the producers varied between 30.5% and 94.8% with a mean of 73.2% suggesting that an estimated 26.8% of the profit is lost due to a combination of technical and allocative inefficiencies in Paddy production. Results from the technical inefficiency model revealed that credit education, farming experience, extension service, MR219 seed variety, broadcast planting method, machine broadcasting method and herbicides were significant factors influencing profit inefficiency. This shows that profit inefficiency in Paddy production could be shortened significantly with improvement in the level of the above socio-economics characteristics of the sampled farmers.

Suggested Citation

  • Yahaya Kaka & Mad Nasir Shamsudin & Alias Radam & Ismail Abd Latif, 2016. "Profit Efficiency among Paddy Farmers: A Cobb-Douglas Stochastic Frontier Production Function Analysis," Journal of Asian Scientific Research, Asian Economic and Social Society, vol. 6(4), pages 66-75.
    • Handle: RePEc:asi:joasrj:v:6:y:2016:i:4:p:66-75:id:3760
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    Cited by:

    1. Lelethu Mdoda & Ajuruchukwu Obi & Zoleka Ncoyini-Manciya & Mzuyanda Christian & Anele Mayekiso, 2022. "Assessment of Profit Efficiency for Spinach Production under Small-Scale Irrigated Agriculture in the Eastern Cape Province, South Africa," Sustainability, MDPI, vol. 14(5), pages 1-17, March.
    2. Anita Rosli & Alias Radam & Khalid Abdul Rahim & Amin Mahir Abdullah, 2020. "Technical Efficiency among Pepper Farmers in Sarawak, Malaysia: A Stochastic Frontier Analysis," Asian Journal of Agriculture and rural Development, Asian Economic and Social Society, vol. 10(3), pages 729-739, October.
    3. Muhammad Bala & Mad Nasir Shamsudin & Alias Radam & Ismail Abd. Latif, 2018. "Profit Efficiency among Cotton Farmers: A Cobb-Douglass Stochastic Frontier Production Function Analysis," Journal of Asian Scientific Research, Asian Economic and Social Society, vol. 8(7), pages 237-246, July.
    4. Lei Wang & Ruyin Long & Hong Chen, 2017. "Study of Urban Energy Performance Assessment and Its Influencing Factors Based on Improved Stochastic Frontier Analysis: A Case Study of Provincial Capitals in China," Sustainability, MDPI, vol. 9(7), pages 1-18, June.

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