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Measurement of Economic Efficiency in Pakistani Agriculture
Author(s) -
Parikh Ashok,
Ali Farman,
Shah Mir Kalan
Publication year - 1995
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1243234
Subject(s) - inefficiency , frontier , economics , subsistence agriculture , econometrics , agriculture , dual (grammatical number) , cost efficiency , function (biology) , measure (data warehouse) , economic efficiency , agricultural economics , microeconomics , computer science , ecology , geography , art , literature , archaeology , database , evolutionary biology , biology , operating system
The behavioral and stochastic cost frontier functions are applied to estimate cost inefficiency by farms. The behavioral approach satisfies most of the assumptions of dual cost function and the likelihood ratio test rejects the market efficiency hypothesis implying less than optimum use of manures, labor, and fertilizers. A suboptimal use is explained by holding size, education, credit, and subsistence needs. Small farms seem to be more efficient than large farms in the region. A measure of inefficiency based on a stochastic cost frontier approach confirms the results of the behavioral approach.