AN INVESTIGATION OF TECHNICAL INEFFICIENCIES OF PRODUCTION OF WHEAT FARMERS IN FOUR DISTRICTS OF PAKISTAN

Abstract

A new, single stage model for estimating technical inefficiencies of production in a stochastic frontier production function is applied in the analysis of panel data on wheat farmers in selected districts of Pakistan. The technical inefficiency effects are highly significant, implying that the traditional production function model is inadequate for the analysis of wheat production of the four districts involved. In the district of Faisalabad, for example, technical inefficiencies of production tend to be smaller for older farmers and those with greater formal schooling. In addition, the levels of wheat production for farmers in Faisalabad tend to approach their potential frontier production levels over time, although there is no evidence of technical change. The technical efficiencies of the wheat farmers show considerable variation over time within each district, such that the mean technical efficiencies range from 57 per cent to 79 per cent in the four districts.

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