The impact of age structure on technical efficiency in Thai agriculture

Abstract

The purpose of this paper was to estimate the age structure effect of agricultural labor on technical efficiency by using stochastic frontier analysis. The translog stochastic frontier production function with the technical inefficiency model was estimated simultaneously using maximum likelihood methods. Panel data of agricultural production at the provincial level from 76 provinces for 2009-2013 were used for estimating the model. The estimated results of the technical inefficiency model identified that the labor force aged 60 years and over increased the technical inefficiency, while the labor force aged 15-59 years reduced the technical inefficiency in Thai agricultural production. Therefore, the public sector should be determined in establishing policy options to encourage young people to become young, smart farmers. The use of agricultural mechanization that is easily used by older farmers should also be promoted, along with financial support to enable them to increase production efficiency.