Abstract
The paper jointly evaluates the determinants of switching to modern rice and its productivity while allowing for production inefficiency at the level of individual producers. Model diagnostics reveal that serious selection bias exists, justifying the use of a sample selection framework in stochastic frontier models. Results revealed that modern variety selection decisions are influenced positively by the availability of irrigation and gross return from rice and negatively by a rise in the relative wage of labour. Adoption of modern rice is higher in underdeveloped regions. Seasonality and geography/location does matter in adoption decisions. Stochastic production frontier results reveal that land, labour and irrigation are the significant determinants of modern rice productivity. Decreasing returns to scale prevail in modern rice production. The mean level of technical efficiency (MTE) is estimated at 0.82. Results also demonstrate that the conventional stochastic frontier model significantly overestimates inefficiency by three points (MTE = 0.79). Policy implications include measures to increase access to irrigation, tenurial reform and keeping rice prices high to boost farm returns and offset the impact of a rise in the labour wage which will synergistically increase the adoption of modern rice as well as farm productivity.
DOI
10.1111/j.1467-8489.2011.00537.x
Publication Date
2011-04-01
Publication Title
Australian Journal of Agricultural and Resource Economics
Volume
55
Issue
2
Publisher
Wiley
ISSN
1467-8489
Embargo Period
2024-11-25
First Page
273
Last Page
290
Recommended Citation
Rahman, S. (2011) 'Resource use efficiency under self‐selectivity: the case of Bangladeshi rice producers', Australian Journal of Agricultural and Resource Economics, 55(2), pp. 273-290. Wiley: Available at: https://doi.org/10.1111/j.1467-8489.2011.00537.x
