Title: Analysis of allocative efficiency in northern Pakistan : estimation, causes and policy implications
Abstract: SUMMARY AND CONCLUSION The sample allocative efficiency was only 42.5 percent, which implied that substantial potential exists in the area to maximise the wheat output (or reduce costs) by re-allocating the use of inputs within existing cash expenditure. The results also imply that allocative inefficiency is as important as technical inefficiency in irrigated Northern Pakistan. These results, however, do not confirm the previous studies in LDCs wherein higher allocative efficiency of the farmers has been observed as compared to the technical efficiency. The estimates of allocative efficiency were also relatively lower than of the other studies in LDCs. To increase allocative efficiency, farmers need to re-allocate their cash resources by increasing the use of fertiliser and reducing the number of ploughings for tillage operation. It was, however, suggested that the estimates of allocative efficiency must be read with caution due to possible measurement problems and misinterpretation of farmers’ objectives. Not much was explained by the regressions on the causes of allocative efficiency. None of the management variables explained the allocative efficiency of the farmers. Access of the farmers to the marketing centres was the major source of allocative efficiency, implying that external factors (interaction of the farmers with the marketing agents) play an important role in achieving higher allocative efficiency.
Publication Year: 1995
Publication Date: 1995-01-01
Language: en
Type: article
Access and Citation
Cited By Count: 26
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