The Economic Assessment of The Production and Technical Efficiency of Bakeries (Focus on Social Factor Using Stochastic Frontier Analysis)

Authors

Department of Agricultural Economics, University of Sistan and Baluchestan, Zahedan, Iran

Abstract

Determining the extent to which the bakeries of Gonabad, Iran have succeeded in the optimal use of certain resources and to explore the possibility of production increase with a certain set of production resources and factors, the technical efficiency of bakeries in this city was estimated. Data were collected from 98 bakeries in Gonabad using simple randomization in 2016. To accomplish research objectives, the stochastic frontier production function and technical inefficiency were simultaneously estimated by the Cabb-Douglas production function. The results showed that the average technical efficiency of the bakeries is 71.12% influenced positively and significantly by the variables of flour and labor. Also, bakers’ age and experience had a negative relationship with their technical inefficiency, but their educational level had no significant effect. On the other hand, the difference between the minimum and maximum technical efficiency was calculated to be 72.75%. According to the results, experience is a requirement to enhance production and efficiency.

Keywords

References

Aghapour Sabaghi, M. (2008). Effective Factors on Technical Efficiency of Palm Trees (Case Study of Jiroft City). National Conference on Dates, Challenges and Potentials of Date Production and Export in Iran (Fifth Year), Retrieved from https://civilica.com/doc/86878/ (In Persian).
Aigner, D. J., & Chu, S. F. (1968). On Estimating the Industry Production Function. American Economic Review, 58, 826- 839.
Babaei, B. (2006). Measuring and Evaluating Efficiency in Commercial Banks Using Data Envelopment Analysis in Iran; Case Study of the National Bank (Unpublished Master's Thesis). Tarbiat Modares University, Iran.
Bailey, D. V., Biswas, B., Kumbhakar, S. C., & Schulthies, B. K. (1989). An Analysis of Technical, Allocative and Scale Inefficiency: the Case of Ecuadorian Dairy Farms. Journal of Agricultural Economics, 14, 30-37.
Battese, G. E., Malik, S. J., & Gill, M. A. (1997). An Investigation of Technical Inefficiency of Production of Wheat Farmers in Four Districts of Pakistan. Journal of Agricultural Economics, 47, 37-49.
Battese, G. E., & Coelli, T. J. ( 1995). Frontier Production Function, Technical Efficiency, and Panel Data: with Application to Paddy Farmers in India. Journal of Productivity Analysis, 3, 153-116.
Bauer, P. W. (1990). Recent Developments in the Econometric Estimation of Frontiers. Journal of Econometrics, 46, 39-56.
Bravo, U., & Evenson, B. E. (1994). Efficiency in Agricultural Production: The Case of Peasant Farmers in Eastern Paraguay. Journal of Agricultural Economics, 10, 43-58.
Chukwuji, C. O., Inoni, O. E., & Ike, P. C. (2007). Determinants of Technical Efficiency in Gari Processing in Delta State Nigeria. Journal of Central European Agriculture, 8, 327- 336.
Farrel, M. J. (1957). The Measurement of Productive Efficiency. Journal of the Royal Statistical, 120(3), 253-281.
Ghosh, R., & Kathuria, V. (2016). The Effect of Regulatory Governance on Efficiency of Thermal Power Generation in India: A Stochastic Frontier Analysis. Energy Policy, 89, 11-24.
Greene, W. H. (1993). A Gamma-distributed Stochastic Frontier Model. Journal of Econometrics, 46, 141-163.
Huq, A., & Arshad, M. (2010). Technical Efficiency of Chili Production. American Journal of Applied Science, 7, 185- 190.
Imami Meybodi, A. (2005). Principles of Measurement of Efficiency and Productivity. Tehran: Institute for Business Studies and Research (In Persian).
Imami Meybodi, A. (2000). Principles of Measurement of Efficiency and Productivity. Tehran: Institute of Business Studies and Research (In Persian).
Jensen, F., & Vestergaard, N. A. (2003). Comparison between Stochastic Production Frontier and Single Output Data Envelopment Models for Danish Seiners Fishing in the North Sea and Skagerak. Cemare Reports in EU Fisheries, Portsmouth (UK), 61, 161-173.
Kumbhakar, S. (1993). Efficiency Estimation in a Profit Maximising Model Using Flexible Production Function. Journal of Agricultural Economics, 10, 143-152.
Kumbhakar, S., & Lovell, C. A. K. (2000). Stochastic Frontier Analysis. Cambridge: Cambridge University Press.
Mazhari, M., & Koopahi, M. (1999). Comparison and Efficiency Analysis of Spring and Autumn Wheat Cultivars. Journal of Agricultural Economics and Development, Seventh (25), 41-29 (In Persian).
Mousavi, S. H., & Khalilian, S. (2005). Investigating Effective Factors on Technical Efficiency of Wheat Production. Quarterly Journal of Agricultural Economics and Development, 52, 60-45 (In Persian).
Naderi Kazakh, M. (2005). Reviewing the Effectiveness of Non-risk Banking and Comparing Non-Bank Banks with World Bank Banks (Master's Thesis, University of Sistan and Bluchestan, Iran). Economic Quarterly, 9 and 10, 23- 57 (In Persian).
Rademehr, Z. (2015). Efficiency of Urban Bakery Units Based on Social Factors; Case Study of Gonabad-Khorasan Razavi Township (Unpublished Master’s Thesis). Sistan and Baluchestan University, Iran (In Persian).
Sardar Shahraki, A., Dehmardeh, N., & Karbasi, A. R. (2012). Efficiency and Productivity Efficiency on the Grain Producer Scale in Sistan Area by Data Envelopment Analysis. Journal of Research in Operations and its Applications, 9(34), 90 -77 (In Persian).
Zargarani, A. (2011). God, Wheat, Bread, People (2nd). Tehran: Monir Publication (In Persian).
Iranian Economic Review
Volume 25, Issue 3
September 2021
Pages 383-395

Files

Share

How to cite

Statistics