Tenure Security and Farm Efficiency Analysis Correcting for Biases from Observed and Unobserved Variables: Evidence from Benin

Abstract

We analyse the impact of land tenure security on the technical efficiency of a sample of smallholder farmers in Benin, based on an output‐oriented stochastic distance function. We use propensity score matching to correct for selection bias from observed variables. The Greene () sample selection model is used to correct for selection bias due to unobserved variables. We estimate meta‐frontiers to analyse agricultural productivity and efficiency differences between landowners and non‐owners. Our results show that non‐owners have consistently higher levels of technical efficiency and productivity.

Does agricultural cooperative membership impact technical efficiency of maize production in Nigeria: An analysis correcting for biases from observed and unobserved attributes

“…Simply put, there is a likelihood that the error component in the selection equation is correlated with the conventional random error in the SPF, resulting to possible self-selection bias, which has to be tackled in order to obtain consistent and unbiased parameter estimates of the causal impact of cooperative membership. To address this estimation issue, we adopt a multi-step procedure as employed in previous studies by Bravo-Ureta et al [ 58 ], González-Flores et al [ 37 ], Villano et al [ 52 ], Lawin and Tamini [ 48 ], Ma et al [ 16 ], and Abdul-Rahaman and Abdulai [ 18 ]. The first stage involves the application of the propensity score matching (PSM) to correct for the selection bias due to observable attributes.…”

“…The parameter ρ denotes the absence or presence of selectivity bias. If ρ is significant, it implies the presence of selection bias stemming from unobserved factors [ 48 , 52 ]. The estimation of the parameters in the model is based on the traditional gradient-based Broyden-Fletcher-Goldfarb-Shanno (BFGS) technique, while the Berndt-Hall-Hall-Hausman (BHHH) algorithm estimator was used to obtain asymptotic standard errors [Greene [ 22 ] contains details regarding structure and estimation of the model].…”

“…To compute the meta-frontier, we employed the parametric stochastic frontier procedure developed by Huang et al [ 53 ] which involves the application of the quasi–maximum likelihood estimation framework. The advantages of this approach over the linear programming (deterministic) approach proposed by O’Donnell et al [ 54 ] are that Huang et al [ 53 ]’s approach produces statistical inferential estimates while it also allows the random shocks to be separated from the technology gaps [ 48 ]. In particular, the predicted values of the results obtained from the estimates of the group-specific frontier are pooled to compute the stochastic meta-frontier.…”

Relations between Land Tenure Security and Agricultural Productivity: Exploring the Effect of Land Registration

“…With few exceptions, land rights were not found to be a significant factor in determining whether or not farmers made land-improving investments, used yield-enhancing inputs, accessed credit, or improved the productivity of land. A study that included Ghana, Kenya and Rwanda, found 'no relationship between cross-sectional variations in land rights and productivity' [50]. The authors argue that the most pronounced relationships were found in Rwanda, where the right to bequeath was a significant determinant of some types of land improvements.…”

Technology and Technical Efficiency Change: Evidence from a Difference in Differences Selectivity Corrected Stochastic Production Frontier Model

“…Related studies have been done by González‐Flores et al (2014) using data from small‐scale potato farmers in Ecuador, and Villano et al (2015) analyzing the impact of certified rice seed varieties in the Philippines. More recently, De los Santos‐Montero and Bravo‐Ureta (2017) examined the productivity effects of a natural resource management program implemented in Nicaragua; Abdulai and Abdulai (2017) assessed the impact of conservation practices on the environmental efficiency of maize producers in Zambia; Abdul‐Rahaman and Abdulai (2018) studied the impact of farmer groups on yields and TE in Northern Ghana; Aravindakshan et al (2018) analyzed the TE of conservation tillage for wheat farming in South Asia; and Lawin and Tamini (2019) measured the impact of land tenure security on TE in Benin.…”