Technical efficiency analysis of coffee production

In the international economy, coffee is one of the most important cash
crops. But, because of socioeconomic and technical restrictions, it is
defined by poor productivity. Modern technology integration with more
efficiency is becoming increasingly vital in resolving this challenge. To
fill the gap, this study was conducted to measure the level of technical
inefficiency and identify its determinants. We develop one dependent
variable and two independent variables. The technical efficiency of coffee
production in the study area was measured by considering the output
obtained per household head as the dependent variable, as well as two
independent variable sets. Those are: 1. The set of variables to measure
the elasticity of coffee production in the study area. 2. The set of
variables identifies factors that may contribute to the technical
inefficiency of coffee producers in the study area. Cross-sectional data
were acquired from 285 randomly chosen households as part of the
study's basic random sample approach. The Cobb-Douglas production
function with a stochastic frontier was used to estimate the coefficients.
The Cobb-Douglas functional form is highly efficient in terms of degrees
of freedom and is suitable for interpreting the elasticity of production.
Therefore, in this investigation, the Cobb-Douglas functional form was
favored. As a result, the output elasticity of the explanatory variable
coefficients used in this study to measure the elasticity of coffee
production in the research region was greater than 1. This indicates that
doubling the inputs more than doubles the output, demonstrating that
returns to scale are boosted because it is greater than one.