A Stochastic Frontier Approach Applied to Farms to Selected Andean Countries

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Sep 2021
In this paper, we estimate a stochastic production function for Bolivia, Ecuador, Colombia, and Peru to investigate whether road infrastructure affects farm technical inefficiency. We use agricultural censuses of Colombia and Bolivia in 2013 and 2014, respectively; national agricultural surveys in 2017 of both Ecuador and Peru; and data on the road network and travel time to the nearest town with 50,000 inhabitants or more. Our main findings are that irrigation increases the value of production and road network decreases farm technical inefficiency, that is, road density (travel time) increases (decreases) farm technical efficiency.