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Off-farm Work, Technical Efficiency, and Production Risk: Empirical Evidence from a National Farmer Survey in Taiwan

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  • Chang, Hung-Hao
  • Wen, Fang-I

Abstract

The objective of this paper is to investigate the differences in yield production, production efficiency, and yield risk for farmers with and without off-farm work. Using a nationwide survey of Taiwanese rice farmers, we estimate a stochastic production frontier model accommodating the technical inefficiency and the production risk simultaneously. Applying the stochastic dominance criterion to rank the estimated technical efficiency and yield risk between professional farmers and farmers with off-farm jobs, our empirical analysis shows that off-farm work is significantly associated with lower technical efficiency. Additionally, farmers with off-farm work face higher production risks. Comparing the marginal effects of input uses on technical inefficiency and yield risk between these groups of farmers, we found a substantial heterogeneity of input uses between these two groups of farmers.

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Bibliographic Info

Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida with number 6164.

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Date of creation: 2008
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Handle: RePEc:ags:aaea08:6164

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Keywords: Off-farm work; technical efficiency; production risk; Taiwan; Crop Production/Industries; Farm Management;

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