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Efficiency estimation and its role in policy recommendations: An application to the Kenyan livestock sector
Author(s) -
Manyeki John Kibara,
Kotosz Balázs
Publication year - 2019
Publication title -
regional science policy and practice
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.342
H-Index - 8
ISSN - 1757-7802
DOI - 10.1111/rsp3.12197
Subject(s) - inefficiency , livestock , investment (military) , production (economics) , production–possibility frontier , economics , pooling , agricultural economics , frontier , poverty , estimation , empowerment , business , economic growth , microeconomics , geography , management , archaeology , artificial intelligence , politics , political science , law , computer science , forestry
Livestock represents 12% of Kenya's economy, and an increase in its efficiency can improve development and reduce poverty. A parametric stochastic frontier model was fitted to a large farm‐level cross‐sectional data set to estimate the efficiency levels and the underlying sources of the output's departure from the optimal levels. We found that the overall mean efficiency in most of the production frontier models is fairly high (above 51%) and sensitive to the model choice. The main factors that significantly reduce the inefficiency of livestock production are the length of education, gender and age of the household head, off‐farm income, land ownership, access to market information and number of livestock technologies adopted. The possible policy options at the disposal of policy‐makers are to increase the investment in infrastructural facilities, education and women's and youths' empowerment through capacity building and resource allocation.