Measuring Agricultural Production Efficiency due to Climates and Hydrology in Bangladesh: An Application of Stochastic Frontier Model

Abstract

The objective of this study is to develop a Cobb-Douglas Translog Stochastic Frontier Production Function or model to measure the different types of agricultural production’s efficiency in Bangladesh due to climates and hydrology. Climatic and hydrological information is divided into two season named as dry season which covers the months October, November, December, January and February, and summer season which covers the months March, April, May, June, July, August  and September considering the climatic condition of Bangladesh. From the analysis, it is obtained that mean efficiency of the rice and cereal production are 0.9203 and 0.97385 respectively. There is a little opportunity to increase production to achieve maximum production by increasing technology. At the same time jute, potato, cereal and species get the maximum frontier production with mean efficiency approximately equal to one and it also implies there is no need any technological advancement and inefficiency occurs due to stochastic noise.

Keywords: Agricultural production, Climate, Hydrology, Efficiency, Stochastic Frontier Model