Farming In The Eastern Amazon-Poor But Allocatively Efficient
This research empirically investigates the well known 'poor-but-efficient' hypothesis formulated by Schultz (1964) assuming that small scale farmers in developing countries are reasonably efficient in allocating their scarce resources by responding positively to price incentives. Deviating from Schultz it is assumed here that scale effects explain a considerable proportion of small scale farmers' relative efficiency. The theoretical underpinnings of the scale efficiency concept are briefly reviewed before a normalized generalized Leontief profit function is modeled by using its output supply and input demand system to capture the joint production of cassava flour and maize by a sample of small scale farmers in the Bragantina region of the Eastern Amazon, Brazil. The discussion on theoretical consistency and functional flexibility is considered by imposing convexity on the GL profit framework. The empirical results confirm our revised hypothesis that small farmers in traditional development settings are 'poor-but-allocatively efficient' by clearly suggesting considerable inefficiency with respect to the scale of operations.
|Date of creation:||2007|
|Date of revision:|
|Contact details of provider:|| Postal: Bundesallee 50, 38116 Braunschweig|
Phone: 0531 / 596 5501
Fax: 0531 / 596 5599
Web page: http://www.gewisola.de/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Lau, Lawrence J & Yotopoulos, Pan A, 1971. "A Test for Relative Efficiency and Application to Indian Agriculture," American Economic Review, American Economic Association, vol. 61(1), pages 94-109, March.
- Wang, Jirong & Cramer, Gail L. & Wailes, Eric J., 1996.
"Production efficiency of Chinese agriculture: evidence from rural household survey data,"
Blackwell, vol. 15(1), pages 17-28, September.
- Wang, Jirong & Cramer, Gail L. & Wailes, Eric J., 1996. "Production efficiency of Chinese agriculture: evidence from rural household survey data," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 15(1), September.
- Johannes Sauer, 2006. "Economic Theory and Econometric Practice: Parametric Efficiency Analysis," Empirical Economics, Springer, vol. 31(4), pages 1061-1087, November.
- Lovell, C A Knox & Sickles, Robin C, 1983. "Testing Efficiency Hypotheses in Joint Production: A Parametric Approach," The Review of Economics and Statistics, MIT Press, vol. 65(1), pages 51-58, February.
- Bravo-Ureta, Boris E. & Evenson, Robert E., 1994.
"Efficiency in agricultural production: The case of peasant farmers in eastern Paraguay,"
Blackwell, vol. 10(1), pages 27-37, January.
- Bravo-Ureta, Boris E. & Evenson, Robert E., 1994. "Efficiency in agricultural production: the case of peasant farmers in eastern Paraguay," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 10(1), January.
- Bhagwati, Jagdish N & Chakravarty, Sukhamoy, 1969. "Contributions to Indian Economic Analysis: A Survey," American Economic Review, American Economic Association, vol. 59(4), pages 2-73, Part II S.
- Taylor, Timothy G. & Scott Shonkwiler, J., 1986. "Alternative stochastic specifications of the frontier production function in the analysis of agricultural credit programs and technical efficiency," Journal of Development Economics, Elsevier, vol. 21(1), pages 149-160, April.
- Oberhofer, W & Kmenta, J, 1974. "A General Procedure for Obtaining Maximum Likelihood Estimates in Generalized Regression Models," Econometrica, Econometric Society, vol. 42(3), pages 579-90, May.
- Diewert, W. E., 1973. "Functional forms for profit and transformation functions," Journal of Economic Theory, Elsevier, vol. 6(3), pages 284-316, June.
- Ball, Richard & Pounder, Laurie, 1996. ""Efficient but Poor" Revisited," Economic Development and Cultural Change, University of Chicago Press, vol. 44(4), pages 735-60, July.
- Schultz, Theodore W, 1975. "The Value of the Ability to Deal with Disequilibria," Journal of Economic Literature, American Economic Association, vol. 13(3), pages 827-46, September.
- W. Erwin Diewert & T.J. Wales, 1989.
"Flexible Functional Forms and Global Curvature Conditions,"
NBER Technical Working Papers
0040, National Bureau of Economic Research, Inc.
- Diewert, Walter E & Wales, Terence J, 1987. "Flexible Functional Forms and Global Curvature Conditions," Econometrica, Econometric Society, vol. 55(1), pages 43-68, January.
- Chambers,Robert G., 1988. "Applied Production Analysis," Cambridge Books, Cambridge University Press, number 9780521314275, June.
- Sherlund, Shane M. & Barrett, Christopher B. & Adesina, Akinwumi A., 2002. "Smallholder technical efficiency controlling for environmental production conditions," Journal of Development Economics, Elsevier, vol. 69(1), pages 85-101, October.
- Christpher B. Barrett, 1997. "How credible are estimates of peasant allocative scale, or scope efficiency? A commentary," Journal of International Development, John Wiley & Sons, Ltd., vol. 9(2), pages 221-229.
- W. David Hopper, 1965. "Allocation Efficiency in a Traditional Indian Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 47(3), pages 611-624.
- Banerjee, Abhijit V & Newman, Andrew F, 1994. "Poverty, Incentives, and Development," American Economic Review, American Economic Association, vol. 84(2), pages 211-15, May.
- Ryan, David L. & Wales, Terence J., 2000. "Imposing local concavity in the translog and generalized Leontief cost functions," Economics Letters, Elsevier, vol. 67(3), pages 253-260, June.
When requesting a correction, please mention this item's handle: RePEc:ags:gewi07:7573. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If references are entirely missing, you can add them using this form.