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Technical Efficiency Of Chinese Grain Production: A Stochastic Production Frontier Approach

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  • Chen, Adam Zhuo
  • Huffman, Wallace E.
  • Rozelle, Scott

Abstract

This article examines technical efficiency of the Chinese grain sector using the framework of stochastic production frontier. The results reveal that: the marginal products of labor and fertilizer are much smaller than that of land; human capital and farm-level specialization have positive effect on efficiency, land fragmentation is detrimental to efficiency, and elder farmers are as efficient as younger farmers. We also examine the effects of size, mechanization and geographic location. Simulation results show that significant output gains can be obtained by eliminating land fragmentation, improving rural education and promoting specialization and mechanization.

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File URL: http://purl.umn.edu/22116
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Bibliographic Info

Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2003 Annual meeting, July 27-30, Montreal, Canada with number 22116.

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Date of creation: 2003
Date of revision:
Handle: RePEc:ags:aaea03:22116

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Keywords: Crop Production/Industries; Productivity Analysis;

References

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  1. Greene, William H., 1980. "On the estimation of a flexible frontier production model," Journal of Econometrics, Elsevier, vol. 13(1), pages 101-115, May.
  2. Alan de Brauw & Jikun Huang & Scott Rozelle, . "Sequencing and the Success of Gradualism: Empirical Evidence from China's Agricultural Reform," Center for Development Economics 173, Department of Economics, Williams College.
  3. Lee, Lung-Fei, 1983. "A test for distributional assumptions for the stochastic frontier functions," Journal of Econometrics, Elsevier, vol. 22(3), pages 245-267, August.
  4. Dwayne Benjamin & Loren Brandt & John Giles, 2003. "The Evolution of Income Inequality in Rural China," Working Papers benjamin-04-01, University of Toronto, Department of Economics.
  5. Jirong Wang & Eric J. Wailes & Gail L. Cramer, 1996. "A Shadow-Price Frontier Measurement of Profit Efficiency in Chinese Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(1), pages 146-156.
  6. Cornwell, Christopher & Schmidt, Peter & Sickles, Robin C., 1990. "Production frontiers with cross-sectional and time-series variation in efficiency levels," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 185-200.
  7. Yang, Dennis, 1995. "Education and Off-Farm Work," Working Papers 95-09, Duke University, Department of Economics.
  8. Putterman, Louis & Chiacu, Ana F., 1994. "Elasticities and factor weights for agricultural growth accounting: A look at the data for China," China Economic Review, Elsevier, vol. 5(2), pages 191-204.
  9. Li, Guo & Rozelle, Scott & Brandt, Loren, 1998. "Tenure, land rights, and farmer investment incentives in China," Agricultural Economics, Blackwell, vol. 19(1-2), pages 63-71, September.
  10. Huang, Jikun & Rozelle, Scott & Rosegrant, Mark W., 1995. "China and the future global food situation," 2020 vision briefs 20, International Food Policy Research Institute (IFPRI).
  11. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
  12. Guang Wan & Enjiang Cheng, 2001. "Effects of land fragmentation and returns to scale in the Chinese farming sector," Applied Economics, Taylor & Francis Journals, vol. 33(2), pages 183-194.
  13. Herriges, Joseph A. & Kling, Catherine L., 1996. "Testing the consistency of nested logit models with utility maximization," Economics Letters, Elsevier, vol. 50(1), pages 33-39, January.
  14. Wang, Jirong & Cramer, Gail L. & Wailes, Eric J., 1996. "Production efficiency of Chinese agriculture: evidence from rural household survey data," Agricultural Economics, Blackwell, vol. 15(1), pages 17-28, September.
  15. Kumbhakar, Subal C & Ghosh, Soumendra & McGuckin, J Thomas, 1991. "A Generalized Production Frontier Approach for Estimating Determinants of Inefficiency in U.S. Dairy Farms," Journal of Business & Economic Statistics, American Statistical Association, vol. 9(3), pages 279-86, July.
  16. Douglas Gollin & Stephen Parente & Robert Evenson & Douglas Gollin, 2002. "The Green Revolution: An End of Century Perspective," Center for Development Economics 171, Department of Economics, Williams College.
  17. Huffman, Wallace E. & Evenson, Robert E., 2000. "Structural and productivity change in US agriculture, 1950-1982," Agricultural Economics, Blackwell, vol. 24(2), pages 127-147, January.
  18. Greene, William H., 1980. "Maximum likelihood estimation of econometric frontier functions," Journal of Econometrics, Elsevier, vol. 13(1), pages 27-56, May.
  19. Christopher Findlay, 1997. "Grain Sector Reform in China," Chinese Economies Research Centre (CERC) Working Papers 1997-01, University of Adelaide, Chinese Economies Research Centre.
  20. Abdulai, Awudu & Huffman, Wallace, 2000. "Structural Adjustment and Economic Efficiency of Rice Farmers in Northern Ghana," Staff General Research Papers 5100, Iowa State University, Department of Economics.
  21. Guilkey, David K & Lovell, C A Knox & Sickles, Robin C, 1983. "A Comparison of the Performance of Three Flexible Functional Forms," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 24(3), pages 591-616, October.
  22. Widawsky, David & Rozelle, Scott & Jin, Songqing & Huang, Jikun, 1998. "Pesticide productivity, host-plant resistance and productivity in China," Agricultural Economics, Blackwell, vol. 19(1-2), pages 203-217, September.
  23. Kumbhakar, Subal C., 1990. "Production frontiers, panel data, and time-varying technical inefficiency," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 201-211.
  24. Stevenson, Rodney E., 1980. "Likelihood functions for generalized stochastic frontier estimation," Journal of Econometrics, Elsevier, vol. 13(1), pages 57-66, May.
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Cited by:
  1. Khor, Ling Yee & Zeller, Manfred, 2012. "Doubts on input quality: The effect of inaccurate fertilizer content on the estimation of production functions and technical efficiency," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126212, International Association of Agricultural Economists.

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