Efficiency of Agricultural Production in the Central Region of Thailand

A stochastic frontier model incorporating inefficiency effects has been employed to analyse the efficiency of agricultural production in the Central Region of Thailand. The agricultural land area, the number of people employed in the agricultural sector, and the amount of fertilisers used in each province are used to derive the production frontier for the Region, while a dummy variable representing coastal provinces and soil quality index is used to explain inefficiencies of individual provinces. Land area is found to be the most important to agricultural production, labour is found to have zero marginal productivity at current levels of employment, and fertiliser has only a low marginal productivity. Coastal provinces are found to be more efficient than inland provinces, but soil quality does not have significant effects on the efficiency of agricultural production.