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Do farmers chooseto be inefficient? evidence from Bicol, Philippines

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Author Info
Larson, Donald F.
Plessmann, Frank

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Abstract

Farming households that differ in their ability, or willingness to take on risks are likely to make different decisions when allocating resources, and effort among income-producing activities, with consequences for productivity. The authors measure voluntary, and involuntary departures from efficiency for rice-producing households in Bicol, Philippines. They take advantage of a panel of household observations from 1978, 1983, and 1994. The unusually long-time span of the panel provides ample opportunities for the surveyed households to learn, and apply successful available technologies. The authors find evidence that diversification, and technology choices do effect outcomes among farmers, although these effects are not dominant. Accumulated wealth, past decisions to invest in education, favorable market conditions, and propitious weather are also important determinants of efficiency outcomes among Bicol rice farmers.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2787.

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Date of creation: 28 Feb 2002
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Handle: RePEc:wbk:wbrwps:2787

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Related research
Keywords: Labor Policies; Environmental Economics&Policies; Crops&Crop Management Systems; Economic Theory&Research; Climate Change; Economic Theory&Research; Environmental Economics&Policies; Crops&Crop Management Systems; Agricultural Knowledge&Information Systems; Climate Change;

References listed on IDEAS
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    Other versions:
  3. Jonathan Morduch, 1995. "Income Smoothing and Consumption Smoothing," Harvard Institute of Economic Research Working Papers 1727, Harvard - Institute of Economic Research.
    Other versions:
  4. Mundlak, Yair & Larson, Donald F, 1992. "On the Transmission of World Agricultural Prices," World Bank Economic Review, Oxford University Press, vol. 6(3), pages 399-422, September.
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  7. Frank Ellis, 2000. "The Determinants of Rural Livelihood Diversification in Developing Countries," Journal of Agricultural Economics, Blackwell Publishing, vol. 51(2), pages 289-302. [Downloadable!] (restricted)
  8. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-32.
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  11. Meeusen, Wim & van den Broeck, Julien, 1977. "Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 435-44, June. [Downloadable!] (restricted)
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  13. 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.
  14. George E. Battese, 1997. "A Note On The Estimation Of Cobb-Douglas Production Functions When Some Explanatory Variables Have Zero Values," Journal of Agricultural Economics, Blackwell Publishing, vol. 48(1-3), pages 250-252. [Downloadable!] (restricted)
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  1. Villano, Renato & Fleming, Euan, 2004. "Analysis of Technical Efficiency in a Rainfed Lowland Rice Environment in Central Luzon Philippines Using a Stochastic Frontier Production Function with a Heteroskedastic Error Structure," Working Papers 12906, University of New England, School of Economics. [Downloadable!]
  2. Mundlack, Yair & Larson, Donald F. & Butzer, Rita, 2002. "Determinants of agricultural growth in Indonesia, the Philippines, and Thailand," Policy Research Working Paper Series 2803, The World Bank. [Downloadable!]
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