Application of Stochastic Frontier Model on Agriculture

Issue of efficiency has come to be one of the most areas of interest, especially in developing countries. Given scanty resource endowment and limited technology dream of growth in less developed countries could be achieved by enhancing the efficiency of production. In chapter one of this book, basic concepts of efficiency, types of efficiency models and their pros and cons are briefly discussed. More importantly, due attention is devoted to model specification of stochastic frontier model. Chapter two deals with the empirical review of researches done on efficiency, mainly using stochastic frontier model. Last but not least, chapter 3 focuses on illustrating the theory and model discussed in the former chapters with case study. Hence, in this chapter, case study on the application of stochastic frontier model on wheat producing areas of Amhara region, Ethiopia, is presented very briefly.