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Price Distortions and Resource Use Efficiency in a Pakistani Province

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  • Ali, Farman
  • Bailey, David
  • Parikh, Ashok

Abstract

The objectives of this paper are to test the hypotheses of technical and price efficiency through estimating translog profit functions using the 1987-88 farm level survey data from the North West Frontier Province (NWFP) of Pakistan. The price efficiency hypothesis cannot be rejected while technical inefficiency is lowest for large sized farms. Despite the widespread use of family labor in NWFP, we find that there is no price inefficiency in the labor market when family labor is imputed at the appropriate wage rate. Moreover, there is no evidence of inefficiency in any of the input or output markets. This is plausible since the region is highly developed and a number of opportunities for work outside the family farm exist. Copyright 1993 by Oxford University Press.

Suggested Citation

  • Ali, Farman & Bailey, David & Parikh, Ashok, 1993. "Price Distortions and Resource Use Efficiency in a Pakistani Province," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 20(1), pages 35-47.
    • Handle: RePEc:oup:erevae:v:20:y:1993:i:1:p:35-47
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    Cited by:

    1. Msangi, Siwa & Rosegrant, Mark, 2007. "A Closer Look at the IMPACT of Climate Change on Country-Level Food Security and Nutrition," Conference papers 331635, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    2. Nwachukwu, Ifeanyi Ndubuto & Onyenweaku, Chris/E, 2007. "Economic Efficiency Of Fadama Telfairia Production In Imo State Nigeria: A Translog Profit Function Approach," MPRA Paper 13469, University Library of Munich, Germany.
    3. Shafiq, Muhammad & Rehman, Tahir, 2000. "The extent of resource use inefficiencies in cotton production in Pakistan's Punjab: an application of Data Envelopment Analysis," Agricultural Economics, Blackwell, vol. 22(3), pages 321-330, April.

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