Ebrahim Moradi; Mosayeb Pahlavani; Ahmad Akbari
Volume 5, 17(3) , December 2015, , Pages 90-79
Abstract
Producers, who have lower efficiency in wheat production, can use the experiences of other producers and increase their efficiency over time. based on existing theories, probably producers with low initial levels of efficiency will have grown their efficiency faster than producers that have high levels ...
Read More
Producers, who have lower efficiency in wheat production, can use the experiences of other producers and increase their efficiency over time. based on existing theories, probably producers with low initial levels of efficiency will have grown their efficiency faster than producers that have high levels of efficiency and a convergence over time will be between them. To investigate the convergence of cost efficiency, information on input prices, yield per hectare and production cost per hectare for irrigated wheat, were collected for 28 provinces in a 10-years period. By studying different methods of stochastic frontier cost function with panel data, "true random effects Model" of stochastic frontier method was selected. The model was estimated by using Simulation Halton method. Then Cost efficiency was calculated for each province. Beta and Sigma convergence test was conducted on cost efficiency. Results show that, changes of land rent (price) has the greatest impact and changes in the price of fertilizer per hectare has the lowest impact on production cost per hectare. Also, we find that There is Beta convergence (convergence of efficiency increase over initial levels) and Sigma convergence (convergence dispersion efficiency over time), between different provinces to improve cost efficiency in wheat production.
