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Journal of Applied Science Studies - Ozean Publications

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<strong>Ozean</strong> <strong>Journal</strong> <strong>of</strong> <strong>Applied</strong> <strong>Science</strong>s 1(1), 2008<br />

x 1 = Quantity <strong>of</strong> seeds (kg/ha)<br />

x 2 = quantity <strong>of</strong> labour in man-days/ha<br />

x 3 = Quantity <strong>of</strong> fertilizer used (kg/ha)<br />

a = intercept (constant term)<br />

b 1 – b 3 = regression coefficients<br />

e = error term<br />

The regression coefficients derived with observation in logarithms, are the elasticities <strong>of</strong> the individual resources.<br />

Their sum indicates the nature <strong>of</strong> returns to scale.With the sum being equal to 1, a given percentage increase in input<br />

results in proportional increase in percentage <strong>of</strong> output.With elasticity sums being more or less than one, implies that<br />

output will increase by a greater or smaller percentage respectively, than inputs.<br />

Estimation <strong>of</strong> Resource Use Efficiency<br />

The efficiency <strong>of</strong> resource use in the production <strong>of</strong> garlic was determined. The marginal value product (MVP) <strong>of</strong> the<br />

resources employed in garlic production was estimated by multiplying the marginal physical product (MPP) by the<br />

unit price <strong>of</strong> the output (Y).<br />

That is MVPxi = MPPxi.Py<br />

Where<br />

MVPxi = marginal value product <strong>of</strong> ith input<br />

MPP = marginal physical product <strong>of</strong> the ith input<br />

PY = price <strong>of</strong> unit output<br />

The marginal value product (MVP) was divided by the cost <strong>of</strong> one unit <strong>of</strong> the (marginal factor cost) to make<br />

influence on resource use efficiency in order to make the relative efficiency <strong>of</strong> resource use the following ratio was<br />

computed:<br />

Where<br />

R = efficiency ratio<br />

MVP = marginal value product<br />

MFC = marginal factor cost<br />

If r = 1 resource is efficiently used<br />

r > 1 resource is over utilized<br />

r < 1 resources is under-utilized<br />

For the semi-log equation used, the expression for estimating MPP was expressed as:<br />

MPPxi =<br />

MPPxi = marginal physical product <strong>of</strong> input xi<br />

bi = the estimated regression coefficient <strong>of</strong> input xi<br />

xi = mean value <strong>of</strong> input being considered<br />

3

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