Human Resource Economics

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Browsing Human Resource Economics by Author "Admassie, Assefa (Dr.)"

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    The Impact of Education on Allocative and Technical Efficiency of Farmers: The Case of Ethiopian Small Holders
    (A.A.U, 1997-06) Asfaw, Abay; Admassie, Assefa (Dr.)
    With the growing interest in human capital theory, analyzing the impact of education on efficiency has been given special emphasis. this study first testes the celebrated hypothesis that 'traditional farmers are efficient but poor'. the result of the stochastic profit frontier function does not support this hypothesis in the Ethiopian case. the result shows that there are considerable amount of deviations from the optimal profit efficiency level. it specifically shows that the mean level of profit efficiency in the sampled fanners is 54.0 percent. this implies that there is 46.0 percent profit inefficiency in the sampled farmers. next it is tried to test the hypothesis of equal allocative and technical efficiency of educated and illiterate farmers by using the modified Y-L profit function model under various linear restrictions. the results reveal that educated farmers are relatively and absolutely more efficient than illiterate fanners. this implies that at the existing level of factor endowments and technology there is a potential to increase agricultural output by expanding education and consequently by making illiterate farmers to operate closer to the efficiency level achieved by their educated neighbors. It is also shown that education increases not only the efficiency of farmers but also the probability of farmers to adopt improved inputs such as fertilizer. the multinomial probit analysis also shows that education and environment variables are substitutes in modem areas and complementary in traditional environments. this suggests that expansion of schools and increasing enrollment rates in rural areas have higher payoff than in modem areas at least in increasing the probability of farmers to adopt fertilizer input.