Primal versus dual farm efficiency: Econometric evidence from Senegal

Date of Completion

January 2003

Keywords

Economics, General|Economics, Agricultural

Degree

Ph.D.

Abstract

This dissertation investigates the effects of alternative methodological approaches on estimates of farm efficiency. A meta-analysis is performed to examine the effects of factors such as functional form, sample size, type of product, number of variables in the model, and estimation technique on farmer's technical efficiency using studies from developing country agriculture. In addition, the validity of neoclassical duality in developing country agriculture is examined using farm-level data from Senegal. Finally, the dissertation compares farmers' efficiency indexes derived from primal and dual models. ^ A pooled cross-section time series data set for a sample of 501 peanut producing farmers going from 1982 to 2000 is used to estimate the primal and dual econometric models and to perform the related efficiency analyses. These data, collected annually by ENEA (Ecole Nationale d'Economie Appliquée ) students, include socioeconomic and agricultural information such as demographic characteristics of household members, agricultural inputs, production, consumption, etc. ^ The findings of the meta-analysis suggest that study methodology does affect the estimation of efficiency. It also appears from the results that distortions in input and output prices should be accounted for when modeling farm level behavior in developing agriculture. These distortions can originate from a number of factors that characterize the environment in which subsistence farmers operate and are likely to impinge on the effectiveness of policies designed to increase agricultural productivity and farm income. ^ The results also indicate that larger peanut farms are more efficient than smaller ones regardless of optimizing behavior. Farmers employ more labor than needed and could benefit from having additional land to cultivate. They also use more inputs than the profit-maximizing farmers and receive prices for their peanut output that are lower than market prices. The analysis suggest that farm-specific characteristics and agro-climatic factors are important elements that influence the degree of efficiency in Senegalese agriculture and that the introduction of new technologies such as La Fleur 11 can serve as a means to improve farmers' productivity. ^

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