Technical Inefficiency of Chili Farms in Thailand
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The primary purpose of this study is to measure and investigate factors affecting technical inefficiency of chili farms in Thailand. This study applies a stochastic frontier production function approach to measure farm-specific technical inefficiency using the 2013 farm-level cross-sectional survey data of Thai chili farms in a single estimation technique applying the maximum likelihood estimation method. The non-negative technical inefficiency effects are modeled as a function of farm-specific management and socio-economic factors. The empirical results suggest two important findings. First, there is confirmation that the difference in variety used has influenced the technical inefficiency of chili farms. Second, good agricultural practice (GAP) also has different impacts on technical inefficiency in Thai chili production in different farms.