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Estimating Technical Efficiency, Input substitution and complementary effects using Output Distance Function: A study of Cassava production in Nigeria

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  • Ogundari, K.
  • Brümmer, Bernhard

Abstract

In this study, we estimate an output distance function in the context of a multi-output and multi-input production technology by stochastic frontier techniques. Unbalanced panel data for smallholder farms that grown cassava and other crops in Southwestern Nigeria covering 2006/07 to 2008/09 farming seasons is used for the analysis. The results show that the marginal rate of transformation (MRT) between “other crops” grown by the farmers and cassava produced relative to the output mix is negative and significantly different from zero. We observed also that increasing returns-to-scale as well as technical progress characterized cassava production in the region. Furthermore, fertilizer and pesticides are found to have significant substitution effects on cassava production in the sample. We also found evidence that, in pairs, farm size and pesticides, labour and fertilizer as well as fertilizer and pesticides jointly exhibit significant complementary effects on cassava production in the region. An average technical efficiency level of 72.1 percent which implies approximately a 39 percent inefficiency level is observed from the study. Over the seasons, we found significant evidence of an increasing trend in technical efficiency level of the farms. Extension, credit and, occupation (i.e., full time farming) are indentified as efficiency increasing policy variables from the study.
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  • Ogundari, K. & Brümmer, Bernhard, 2011. "Estimating Technical Efficiency, Input substitution and complementary effects using Output Distance Function: A study of Cassava production in Nigeria," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 12(2).
  • Handle: RePEc:ags:aergaa:178223
    DOI: 10.22004/ag.econ.178223
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    Cited by:

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    2. Nchinda, Valentine P. & Villano, Renato A. & Hadley, David & Morales, Emilio L., 2016. "Performance of smallholder minisett seed yam farm enterprises in Cameroon," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 11(4), pages 1-15, December.
    3. Nguyen, Huy, 2014. "Crop diversification, economic performance and household’s behaviours Evidence from Vietnam," MPRA Paper 59168, University Library of Munich, Germany, revised 05 Oct 2014.
    4. Ripoll-Zarraga, Ane Elixabete & Huderek-Glapska, Sonia, 2021. "Airports’ managerial human capital, ownership, and efficiency," Journal of Air Transport Management, Elsevier, vol. 92(C).
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    6. Fall, François & Akim, Al-mouksit & Wassongma, Harouna, 2018. "DEA and SFA research on the efficiency of microfinance institutions: A meta-analysis," World Development, Elsevier, vol. 107(C), pages 176-188.
    7. Nguyen, Huy Quynh, 2017. "Analyzing the economies of crop diversification in rural Vietnam using an input distance function," Agricultural Systems, Elsevier, vol. 153(C), pages 148-156.

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