International Journal of Statistics and Applied Mathematics
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2023, Vol. 8, Special Issue 6

Technical, allocative and economic efficiency of soybean: A stochastic frontier approach


Author(s): Mayuri Raut, NV Shende and UT Dangore

Abstract: Increasing the efficiency in production assumes greater significance in attaining the potential output. An attempt has been made in this study to estimate technical, economic and allocative efficiencies of soybean farms using stochastic frontier approach and stochastic frontier profit function. Statistical analysis of study was done by using R software. The mean technical, economic and allocative efficiencies were found to be 82.188 per cent, 70.438 per cent and 86.44 per cent respectively. The result revealed that, the technical efficiency ranges from 43.20 to 97.90 per cent it means the average efficient farmers and least efficient farmers, to achieve the technical efficiency level of the most efficient farmers could only bring about 15.42 per cent and 55.87 per cent increase in production. Similarly the economic efficiency ranges from 16.54 to 94.96 per cent means the average efficient farmers and the least farmers, to achieve the economic efficiency level of the most efficient farmers could bring about 25.83 per cent and 82.58 per cent increase in production. Similarly, the allocative efficiency ranges from 25.70 to 192.34 per cent, the average efficient farmers and the least efficient farmers, to achieve the allocative efficiency level of the most efficient farmers could bring about 55.05 per cent and 86.63 per cent increase in production. Seed is statistically significant and positive value 1.01079 in technical efficiency, indicated that farmers could increase per hectare yield by applying more units of these inputs. One per cent increase in the prices of bullock labour (-0.05628) was found to reduce profit by 0.05 per cent. The coefficient of prices of seed (1.01079) and fertilizer prices (0.36189) showed statistically significant and positive effects on profits in economic efficiency. The study showed that, the mean technical efficiency values of greater than 90 per cent for majority (33.61%) of soybean farmers. While, majority (40.91 per cent) of the farmers in sample operated at economic efficiency levels lied between 70 to 80 per cent and 41.18 per cent of the sample farmers achieved allocative efficiency of above 90 per cent level. Frequency distribution of higher efficiency farmers indicated that, there was little scope for improving the efficiencies with existing technology.

Pages: 1201-1206 | Views: 197 | Downloads: 4

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How to cite this article:
Mayuri Raut, NV Shende, UT Dangore. Technical, allocative and economic efficiency of soybean: A stochastic frontier approach. Int J Stat Appl Math 2023;8(6S):1201-1206.

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