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Farm Household Production Efficiency: Evidence from The Gambia

Listed author(s):
  • Chavas, Jean-Paul
  • Petrie, Ragan
  • Roth, Michael

This paper investigates the economic efficiency of farm households, with an application to The Gambia. The efficiency analysis is conducted not at the farm level but at the household level, thus capturing the importance of off-farm activities. Output-based measures of technical, allocative and scale efficiency are generated using nonparametric measurements. An econometric analysis of factors affecting the efficiency indexes is then conducted using a Tobit model. Technical efficiency is fairly high indicating that access to technology is not a severe constraint for most farm households. A large number of farm households are found to be scale inefficient, but the cost of scale inefficiency is modest. Allocative inefficiency by contrast is found to be important for the majority of farm households. Based on the Tobit results, imperfections in markets for financial capital and non-farm employment contribute to significant allocative inefficiency. The econometric results also suggest that institutional reform designed to improve the functioning of factor markets would have large positive effects on household welfare.

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File URL: https://www.unioviedo.es/oeg/ESP/esp_2003_05.pdf
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Paper provided by University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG) in its series Efficiency Series Papers with number 2003/05.

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Length: 42
Date of creation: 2003
Handle: RePEc:oeg:wpaper:2003/05
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  1. Emmanuel Skoufias, 1994. "Using Shadow Wages to Estimate Labor Supply of Agricultural Households," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(2), pages 215-227.
  2. Forsund, Finn R. & Lovell, C. A. Knox & Schmidt, Peter, 1980. "A survey of frontier production functions and of their relationship to efficiency measurement," Journal of Econometrics, Elsevier, vol. 13(1), pages 5-25, May.
  3. Adesina, Akinwumi A. & Djato, Kouakou K., 1996. "Farm size, relative efficiency and agrarian policy in Cote d'Ivoire: profit function analysis of rice farms," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 14(2), July.
  4. Seyoum, E.T. & Battese, George E. & Fleming, E.M., 1998. "Technical efficiency and productivity of maize producers in eastern Ethiopia: a study of farmers within and outside the Sasakawa-Global 2000 project," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 19(3), December.
  5. Udry, Christopher, 1996. "Gender, Agricultural Production, and the Theory of the Household," Journal of Political Economy, University of Chicago Press, vol. 104(5), pages 1010-1046, October.
  6. Adesina, Akinwumi A. & Djato, Kouakou K., 1996. "Farm size, relative efficiency and agrarian policy in Cote d'Ivoire: profit function analysis of rice farms," Agricultural Economics, Blackwell, vol. 14(2), pages 93-102, July.
  7. Sotnikov, Sergey, 1998. "Evaluating the Effects of Price and Trade Liberalisation on the Technical Efficiency of Agricultural Production in a Transition Economy: The Case of Russia," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 25(3), pages 412-431.
  8. Benjamin, Dwayne, 1992. "Household Composition, Labor Markets, and Labor Demand: Testing for Separation in Agricultural Household Models," Econometrica, Econometric Society, vol. 60(2), pages 287-322, March.
  9. Seiford, Lawrence M. & Thrall, Robert M., 1990. "Recent developments in DEA : The mathematical programming approach to frontier analysis," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 7-38.
  10. Frank Place & Peter Hazell, 1993. "Productivity Effects of Indigenous Land Tenure Systems in Sub-Saharan Africa," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(1), pages 10-19.
  11. Varian, Hal R, 1984. "The Nonparametric Approach to Production Analysis," Econometrica, Econometric Society, vol. 52(3), pages 579-597, May.
  12. Subhash C. Ray & Dipasis Bhadra, 1993. "Nonparametric Tests of Cost Minimizing Behavior: A Study of Indian Farms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(4), pages 990-999.
  13. Andre Croppenstedt & Mulat Demeke, 1997. "An empirical study of cereal crop production and technical efficiency of private farmers in Ethiopia: a mixed fixed-random coefficients approach," Applied Economics, Taylor & Francis Journals, vol. 29(9), pages 1217-1226.
  14. Hanan G. Jacoby, 1993. "Shadow Wages and Peasant Family Labour Supply: An Econometric Application to the Peruvian Sierra," Review of Economic Studies, Oxford University Press, vol. 60(4), pages 903-921.
  15. Lopez, Ramon E., 1984. "Estimating labor supply and production decisions of self-employed farm producers," European Economic Review, Elsevier, vol. 24(1), pages 61-82.
  16. Seyoum, E. T. & Battese, G. E. & Fleming, E. M., 1998. "Technical efficiency and productivity of maize producers in eastern Ethiopia: a study of farmers within and outside the Sasakawa-Global 2000 project," Agricultural Economics, Blackwell, vol. 19(3), pages 341-348, December.
  17. Chavas, Jean-Paul & Aliber, Michael, 1993. "An Analysis Of Economic Efficiency In Agriculture: A Nonparametric Approach," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 18(01), July.
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