JBS Vol 03. Num 2. 2001 - PATTERNS AND SOURCES OF TECHNICAL INEFFICIENCY OF FARMS IN BANGLADESH

This paper assesses the technical efficiency and performance of rice farmers in Bangladesh using a Cobb-Douglas
stochastic frontier and a translog stochastic frontier approach. Farm-specific technical efficiencies are estimated
using farm-level cross-sectional survey data in a single estimation technique, which includes both stochastic
frontiers and inefficiency effects models, applying the maximum likelihood estimation method. The non-negative
technical inefficiency effects are modeled as a function of farm-specific socioeconomic factors, irrigation
infrastructure and environmental factors. Results imply no variation in technical efficiency estimates obtained from
Cobb-Douglas and translog stochastic frontiers. Results also show that the ranking of farms along the efficiency
spectrum are not affected by the choice of functional form of the stochastic frontiers. Moreover, the results indicate
that the technical inefficiency effects tend to be significantly influenced by factors measuring irrigation
infrastructure and environmental degradation. Therefore, policies leading to improvement of irrigation infrastructure
and reduction of land degradation could be beneficial in decreasing inefficiency of farm households in Bangladesh.