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Article Information:
Poverty and Efficiency among the Farming Households in Nigeria: A Guide for Poverty Reduction Policy
B.C. Asogwa, J.C. Umeh and V.A. Okwoche
Corresponding Author: B.C. Asogwa
Submitted: 2011 December, 16
Accepted: 2012 January, 08
Published: 2012 February, 25 |
Abstract:
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This study analysed the relationship between poverty and efficiency among the farming households
in Nigeria using farm level data from Benue State. The P-alpha measure of poverty and the Food Energy Intake
(FEI) method were used for the measurement of poverty gap among the respondents, whereas Stochastic
Frontier was used to obtain the efficiency estimates. Correlation analysis was used to achieve the objective of
the study. The study showed that average level of technical, allocative and economic efficiency was estimated
at 30, 12 and 36%, respectively. Allocative inefficiency was worse than technical inefficiency, implying that
the low level of overall economic efficiency was the result of higher cost inefficiency. The study further showed
an inverse relationship between poverty gap and technical efficiency estimates among the respondents, implying
that as average productivity increases poverty decrease. Furthermore, the study showed a direct relationship
between poverty gap and allocative efficiency estimates, implying that as the cost of technical efficiency
increases poverty increases. The study also showed a direct relationship between poverty gap and economic
efficiency estimates among the respondents, implying that as the cost of maximizing output increases poverty
increases. Overall economic efficiency and hence poverty reduction among the respondents resulted more from
technical efficiency than allocative efficiency. The policy implication is that poverty reduction among the
farming households is linked with improving farm efficiency. If poverty is to be eradicated among the farming
households, farming activities must be efficient.
Key words: Correlation analysis, efficiency, farming households, poverty, poverty reduction policy, ,
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Cite this Reference:
B.C. Asogwa, J.C. Umeh and V.A. Okwoche, . Poverty and Efficiency among the Farming Households in Nigeria: A Guide for Poverty Reduction Policy. Current Research Journal of Economic Theory, (1): 6-10.
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ISSN (Online): 2042-485X
ISSN (Print): 2042-4841 |
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