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Sources of Technical Efficiency Differentials among Smallholder Farmers in Tigray, Northern Ethiopia: Panel Data Evidence and Implications for Food Security


This paper attempts to derive farmer-specific technical efficiency and simultaneously determine the socioeconomic factors affecting inefficiency for a sample of smallholder farmers from northern Ethiopia using a random-effect stochastic frontier model. The coefficient estimates of the β parameters (i.e., conventional inputs) showed that the all variables land, labor, modern inputs, and value of owned farm implements are significant all with positive signs except for number of oxen. ML estimates of the γ parameters (factors of inefficiency) also showed that among all the variables considered education (read and write1), involvement in off-farm activities and access to irrigation are most significant. Individual year estimates imply that the discrepancy between the observed level of output and the maximum attainable level of output is dominated by factors of technical inefficiency rather than random factors outside the control of the seemingly suggesting for the scope (opportunities) for increased productivity through more efficient use of farmers' resources and inputs with current technology. However, panel estimates imply that the discrepancy is dominated by random factors outside the control of the farmer suggesting that increase in productivity (i.e., enhancing food security) largely requires investment new inputs and technology to shift the production possibility frontier upwards.

Corporate Author: 
Worku Gebeyehu and Demirew Getachew (Editors); Ethiopia Economics Association
Ethiopian Economic Association (EEA)
Primary Descriptors: 

Technical efficiency/inefficiency

Secondary Descriptor: 

 Smallholder farmers

Geographic Descriptors: 
Cataloge Date: 
Broad Subject heading: 
Food security
Serial Key Title: 
Proceedings of the first Regional Conference of the Tigray Regional State Economic Development
Publication catagory: 
Content type: 
Publication date: 
2013-03-01 00:00:00
Conference Place: 
Place of publication: 
Addis Ababa, Ethiopia
Type of material: 
Current frequency: 
Chapter conference: 
Conference date: 
July 14, 2012