TECHNICAL EFFICIENCY: A COMPARISON OF PRODUCTION FRONTIER METHODS

Recent differences in the measurement of farm efficiency may be related to the methods employed. Here, four alternative production frontiers are estimated using time-series, cross-section data for a sample of Illinois grain farms. Efficiency measures are found to be highly correlated between nonparametric methods, and between parametric methods. However, large differences are noted when efficiency measures are compared between nonparametric and parametric methods. An analysis of farms with large differences, which are efficient under the nonparametric method, indicates that correlations between efficiency measures are much higher when these firms are excluded.     

FRONTIER PRODUCTION FUNCTIONS AND THE MEASUREMENT OF TECHNICAL EFFICIENCY

A measure of relative producer performance is often useful for policy purposes and the concept of economic efficiency provides a theoretical basis for such a measure. Yet several authors argue that the concept of efficiency and conventional efficiency measures are meaningless for the evaluation of real-world performance. This paper examines some of the issues and argues that producers' performance may be measured using the concept of technical efficiency. Alternative technical efficiency measures are examined including those of Timmer (1971) and Kopp (1981). A frontier production function is estimated for a cross-section of North West farms and these two measures are computed under various assumptions on the fixity of agricultural inputs.     

MEASUREMENT OF TECHNICAL EFFICIENCY IN THE NORTH-WEST FRONTIER PROVINCE OF PAKISTAN

The objective of this study is to measure technical efficiency, using a translog frontier production function on cross-sectional data from 397 farms in the North-West Frontier Province of Pakistan in 1988–89. The estimated farm level technical efficiency is found to be dependent upon levels of credit and education, farmers' ages and the extent of land fragmentation. Lack of education, restricted credit and fragmented holdings are found to be causes of inefficiency; hence policies which consolidate holdings, provide credit or educate farmers will tend to improve efficiency in agriculture.     

EVALUATING DEMAND FOR DEER HUNTING: A COMPARISON OF METHODS

This study compares two methods of estimating hunters' demand for deer hunting in an area in Southwest Manitoba. Benefits to hunters are calculated from estimated demand using the concept of consumers' surplus. Methods used to estimate demand are: (1) a travel-cost approach and (2) an interview on hunters' willingness to pay for hunting. The results from the two methods are not identical. Likely reasons for this and suggestions for further research are discussed. Although the two methods probably measure different things and may be subject to different errors, it is felt that use of both methods provides a useful check on the validity of results
Cette étude compare deux méthodes d'estimation de la demande de la chasse au chevreuil dans un terrilore donne du sud ouest Manitoba. En utilisant le principe de l'excédent aux consommateurs, les bénifices aux chasseurs sont déduits à partir de la demande estimée. Les méthodes utilisées afin d'estimer cette demande sont: (1) le coût de transportation, et (2) une entrevue afin de sonder le degré d'acceptance de payer pour chasser. Les résultats obtenus par ces deux méthodes ne sont pas identiques. Les raisons probables de tels résultats et les suggestion apportées en vue de recherches futures y sont discutées. Malgre que ces deux méthodes calculent probablement des entilés différentes et q'elles sont sujettes a des erreurs differentes, l'on croit que utilisation de pair de ces méthodes apporte une vérification fort utile de la validité des résultats     

A COMPARISON OF DEPRECIATION METHODS UNDER CURRENT COST ACCOUNTING

In New Zealand the Richardson Report has recommended to government the adoption of a form of inflation accounting known as Current Cost Accounting (CCA). This paper reports research carried out to determine which of the traditional historical cost depreciation methods used in farm accounting might be most appropriate when adapted to a current cost basis. The current cost depreciation methods are compared on the basis of their ability to predict accurately actual replacement values for a survey sample of farm tractors and headers. The resultant measures of depreciation are compared with those currently allowable under New Zealand taxation laws, and the proposition that investment allowances on purchases of new machinery offset the inadequacies of historical cost depreciation is discussed.     

THE MEASUREMENT OF MANAGERIAL EFFICIENCY IN AGRICULTURE*

This paper is an outline only of a Ph.D. thesis submitted to the University of Nottingham. The paper proposes a socio-economic model of farm production with special emphasis placed on the role of management: formulates an econometric model, to represent the socio-economic model, in which the degree of managerial efficiency appears as a variable, and suggests means of interpretation of the econometric model to aid farm planning at the individual farm level.     

A FURTHER NOTE ON THE MEASUREMENT OF EFFICIENCY AND ECONOMIES OF FARM SIZE

Efficiency has a precise meaning in the case of the optimally conditions associated with the perfectly competitive norm. However, the efficiency concept loses a precise meaning and much of its usefulness under real world conditions of uncertainty and costly information since efficiency is inescapably evaluative and cannot be defined and measured independently of the goals and knowledge of the decision maker. Similarly, the concept ‘economies of size’ is shown to lose its normative significance when specialised resources and other unique aspects of the firm are taken into account. Although the economist has no objective procedure by which to measure the efficiency of entrepreneurial activity, it is argued that in the real world of uncertainty and disequilibrium, there is always scope for entrepreneurial activity in the sense of unexploited profit opportunities.     

ANALYSIS OF THE TECHNICAL EFFICIENCY OVER TIME OF WEST JAVANESE RICE FARMS

The high costs and effectiveness of Indonesia's current mix of policies aimed at maintaining rice self-sufficiency, for example fertiliser and other subsidies, has been questioned. Consequently, attention has turned to developing policies to increase farmers yields through efficiencies, for example as a result of better extension. The main issue investigated in this article is whether existing yields can be significantly improved through increasing the efficiency of individual farmers. Production frontiers are estimated and technical efficiencies/inefficiencies predicted from panel data and for one year at a time. Different results are explained in relation to a number of aspects, especially the rate of adoption of new technologies, and policy actions are recommended. The robustness of the analysis is examined as conclusions obtained from past analyses have often been inconsistent.     

A COMPARISON OF RISK EFFICIENCY CRITERIA IN EVALUATING GROUNDNUT PERFORMANCE IN DROUGHT-PRONE AREAS

This paper contributes to an evaluation of the performance of ground nuts in drought-prone areas by estimating yield response functions to water from experimental data. They are combined with meteorological data to simulate yields by location. Efficient genotypes are identified by several risk criteria. Genotype rankings based on these risk criteria and simulated yields are different from those based on experimental data and plant scientists' traditional methods of evaluation.     

MEASURING TECHNICAL EFFICIENCY FROM PRODUCTION FUNCTIONS: SOME FURTHER ESTIMATES

The concept of economic and technical efficiency is fundamental to agricultural policy-making, and Russell and Young (1983) in this Journal provide a recent addition to the literature for British agriculture. They estimate technical efficiency for a cross-section of farms in the North-West of England for the year 1977/8. However, such measures for a single year may be influenced by particular events in that year. This paper considers some further estimates of farm efficiency but for the longer, four-year period 1974/5 to 1977/8. Three measures of technical efficiency are estimated, two using econometric techniques and one using linear programming methods. It is found that there are low correlations between these different measures of technical efficiency both over time and at one point in time. This casts doubt on the usefulness of measuring efficiency using cross-section (single period) survey data.     

RECENT DEVELOPMENTS IN FRONTIER MODELLING AND EFFICIENCY MEASUREMENT

In this paper recent developments in the estimation of frontier functions and the measurement of efficiency are surveyed, and the potential applicability of these methods in agricultural economics is discussed. Frontier production, cost and profit functions are discussed, along with the construction of technical, allocative, scale and overall efficiency measures relative to these estimated frontiers. The two primary methods of frontier estimation, econometric and linear programming, are compared. A survey of recent applications of frontier methods in agriculture is also provided.     

A CONCEPTUAL FRAMEWORK FOR ANALYSIS OF MARKET EFFICIENCY

Important agricultural marketing policies and decisions are constantly before industry and government. Much market research is being supported. There is a need to “bridge” research with policy. The core of this paper is to develop a conceptual framework that spans the needed analysis of marketing efficiency. The basic point is that marketing policy must focus on both competition and physical operations. The analysis of this paper builds upon Clark's concept of workable competition and Sosnick's extension to the concept of effective competition. Market efficiency is separated into operational efficiency and exchange efficiency components; the determinants of each component are diagnosed and analyzed in terms of costs and pricing. While the agricultural marketing process produces increments of product form, space, and time utility, costs are incurred. Cost analysis is central to the notion of operational efficiency; cost levels depend upon market organization and the feasible set of market logistics. Exchange efficiency refers primarily to price; the effectiveness with which price reflects costs depends upon market structures and the applicable competitive strategies. The conceptual framework developed in this paper integrates the preceding relationships and formalizes an approach for decisions. Trade-offs often exist between operational efficiency and exchange efficiency components of market efficiency. When a trade-off relationship exists, market efficiency is maximized by equalizing the gain in one component with the opportunity-cost loss in the other component. Le gourvernement el I'industrie font continuellemeni face à?importante décisions dans le domaine des marchés el de la politique agricloe. Ces deux groupes subven-tionnenl les recherches dans ce domaine. II y a un besoin de Her la recherche avec la politique. ?essentiel de cet article est de développer un côdre qui comprend ?analyse nécessaire pour ?efficacité du marché, le point important est que le politique du marché doit se concentrer sur le concurrence et les operations. L'analyse de cet article travail sur le théorie de concurrence réalisable de Clark et sur celle Sosnick traitant de ?Extension de la concurrence effective. ?efficacité du marché est diversé en deux éléments: ?exploitation efftcace el ?echange éfficace, les facteurs déterminant de chaque élément sont soumis à un diagnostic et à une analyse en termes du coût et du prix     

AN INDEX OF MANAGEMENT EFFICIENCY FOR EGYPTIAN AGRICULTURE: A CASE STUDY OF LARGE FARMS

An index of management efficiency in cotton production is formed for each of five geographical regions in Egypt for farms of large enough size for the functions of management and labour to be separated. The index is introduced as a variable in the production function and reveals distinct differences between the regions in the scope for improving management efficiency.