THE LAHORE JOURNAL OF ECONOMICS Lahore School of Economics

ISSN 1811-5438 THE LAHORE JOURNAL OF ECONOMICS Lah or e Sc h o o l of Econ o m i c s Ab e d u l l a h , Khu d a Bak h s h an d Bas hi r Ah m a d Tec h n i c a l Effici e n c y an d its De t e r m i n a n t s in Pot a t o Prod u c t i o n , Evid e n c e fro m Punja b , Paki s t a n Wi n g - Ke u n g W o n g , Am a n Ag a r w a l an d Ne e - Tat W o n g The Dis a p p e a r i n g Cale n d a r Ano m a l i e s in th e Sin g a p o r e St o c k Mark e t Md Azi z u l Bat e n , Ma s u d Ran a , Su m o n k a n t i Das & Md Ab d ul Khal e q u e Tec h n i c a l Effici e n c y of So m e Sel e c t e d Man uf a c t u r i n g Indu s t r i e s in Ban g l a d e s h : A St o c h a s t i c Fron ti e r Analy s i s Onur Aru g a s l a n & Loui s e Mill e r On th e Condi ti o n i n g of th e Fina n c i a l Mark e t ’ s Rea c t i o n to Se a s o n e d Equit y Off eri n g s Him a y a t u l l a h Kha n Willin g n e s s to Pay for Mar g a ll a Hills Nati o n a l Park: Evid e n c e fro m th e Trav e l Cost Met h o d Khali d Mus h t a q Pop ul a t i o n Grow t h an d Econ o m i c De v e l o p m e n t : Te s t for Caus a li t y Jam s h e d Y Upp al & Inay a t U Man gl a Ars h a d Zah e e r , Kas h i f ur Re h m a n an d Abr a r Ah m a d Orga n i z a t i o n a l Cultur e As s e s s m e n t of Sm a ll & Me di u m - Siz e d Ent e r pri s e s No t e : So m e s h K Mat h u r Und e r s t a n d i n g on Rul e s an d Proc e d u r e s Gov e r n i n g th e Reg ul a t o r y Res p o n s e to Mark e t Volatilit y and Manipul a t i o n : A Cas e Stud y of Mumb a i and Karachi Stoc k Exch a n g e s Safi Ullah Kha n Rol e of th e Fut ur e s Mark e t on Vola t ili t y an d Pric e Disc o v e r y of th e Spo t Mark e t : Evid e n c e fro m Paki s t a n ’ s St o c k Mark e t Volu m e 11, No Se t t l e m e n t of Dis p u t e s : A De v e l o p i n g Coun t ri e s Per s p e c t i v e Bo o k Re v i e w : So h a i b Sha h i d Fre a k o n o m i c s : A Rog u e Econ o m i s t Explor e s th e Hidd e n Sid e of Everyt h i n g Jul- De c , 20 THE LAHORE JOURNAL OF ECONOMICS Editor s Dr Azam Chaudhry, Editor Dr Theresa Thompson Chaudhry, Editor Ms Nina Gera, Co-Editor Edit ori a l Advi s o r y Boar d Dr Ajaz Hussain Dr Ashish Narain Dr Gwendolyn A Tedeschi Dr Inayat Ullah Mangla Dr Khalid Nadvi Dr Jamshed Y Uppal Dr Moazam Mehmood Dr Phillip Garner Dr Rashid Amjad Dr Saleem Khan Dr Sarwat Jahan Dr Shahrukh Rafi Khan Prof Robert Neild Dr A R Kemal Dr Akmal Husain Dr Aslam Chaudhry Dr Kaiser Bengali Dr Khalid Aftab Dr Munir Ahmad Dr Nasim Hasan Shah Dr Naved Hamid Dr Nuzhat Ahmad Dr Pervez Tahir Dr Salman Ahmad Dr Sarfraz Qureshi Dr Shahid Amjad Chaudhry Dr Sohail Zafar Dr Tariq Siddiqui Prof Viqar Ahmed Editorial Staff: Tele No: 5874385 Telefax: 0092 - 42 - 5714936 E-mail: nina@lahoreschool.edu.pk Publish er : Lahore School of Economics, Lahore, Pakistan Correspondence relating to subscriptions and changes of address should be sent to The Lahore Journal of Econo mi c s , 105-C-2, Gulberg III, Lahore - 54660 - Pakistan Instructions to authors can be found at the end of this issue No responsibility for the views expressed by authors and reviewers in The Lahore Journal of Econo mi c s is assumed by the Editor, the Co-Editor and the Publishers Copyright by: Lah or e Sch o o l of Econ o m i c s 11 2006 THE LAHORE JOURNAL OF ECONOMICS Cont e n t s Vol 11 , 20 Technical Efficiency and its Determinants in Potato Production, Evidence from Punjab, Pakistan Abed ullah, Khuda Bakhs h and Bashir Ah m a d Technical Efficiency of Some Selected Manufacturing Industries in Bangladesh: A Stochastic Frontier Analysis Md Azizul Baten, Masud Rana, Su m o n k a n ti Das and Md Abdul Khalequ e 23 Willingness to Pay for Margalla Hills National Park: Evidence from the Travel Cost Method Himaya t ullah Khan 43 Population Growth and Economic Development: Test for Causality Khalid Mushta q 71 Regulatory Response to Market Volatility and Manipulation: A Case Study of Mumbai and Karachi Stock Exchanges Jamsh e d Y Uppal and Inayat U Mangla 79 Role of the Futures Market on Volatility and Price Discovery of the Spot Market: Evidence from Pakistan’s Stock Market Safi Ullah Khan 107 The Disappearing Calendar Anomalies in the Singapore Stock Market Wing- Keung Wong, Aman Agarwal and Nee- Tat Wong 123 On the Conditioning of the Financial Market’s Reaction to Seasoned Equity Offerings Onur Arugaslan & Louise Miller 141 Organizational Culture Assessment of Small & Medium-Sized Enterprises Arshad Zahe er, Kashif ur Reh m a n and Abrar Ah m a d 155 Not e : Understanding on Rules and Procedures Governing the Settlement of Disputes: A Developing Countries Perspective So m e s h K Mathur Boo k Revi e w : Freakonomics: A Rogue Economist Explores the Hidden Side of Everything Soh b Sha hi d 169 189 The Lahore Journal of Econo mi c s 11 : (Winter 2006) pp 1-22 Tech n i c a l Effici e n c y and its De t e r m i n a n t s in Pot a t o Prod u c t i o n , Evid e n c e from Punja b , Paki s t a n Abe d u ll a h , Khud a Bakh s h and Ba s hir Ahm a d * Ab s t r a c t Potato cultivation accoun t s for 5.71 perce n t in total cropp e d area of the Punjab provinc e and it supple m e n t s the diet of the growing population at lower prices as com p ar e d to grains, m e a t and chick e n Data from 100 farm er s , 50 each from the districts of Okara and Kasur during the year 2002- 2003 (the autu m n crop) has bee n collect e d The stud y esti m a t e s the tech nical efficienc y in potato produc tion by e m plo yin g the Cobb- Douglas stoch a s tic productio n frontier approach The null hypo t h e s i s of no tech nical inefficienc y in the data is reject e d Our results indicat e that potato farm er s are 84 perce n t tech nically efficien t, implying significant pot e n tial in potat o produc tion that can be dev elo p e d By shifting the averag e farm er to the produc tion frontier, the averag e yield would increas e from 8.33 tons per acre to 9.92 tons per acre using the available resourc e s The additional quantit y of potato e s gath er e d throug h efficienc y improv e m e n t s would gen er a t e Rs 990.8 ($16.5 1) million of reve n u e each year Cons ultation with ext e n s io n work ers significantly contribut e s to the improv e m e n t of tech nical efficienc y and implies that the ext e n s io n depart m e n t should be one of the major target e d variables from the policy point of view in order to improv e technical efficienc y in potato produc tion The authors are Assistant Professor, Post Graduate Student, and Professor, respectively in the department of Environmental and Resource Economics, University of Agriculture Faisalabad, Pakistan * Abe d ullah, Khuda Bakhs h and Bashir Ah m a d Ke y Wor d s : Potato, tech nical efficienc y stocha s tic produc tion frontier, Jel Clas s i fi c a t i o n : QR Intro d u c t i o n The population of Pakistan is growing at the rate of 2.1 percent per annum, with the addition of 3.1 million persons every year (Government of Pakistan, 2003) However, the supply of food crops is not keeping pace with population growth To fill the gap between supply and demand, Pakistan invests its scarce resources to import grains and other food items Wheat is a dominant crop while other labor intensive and more remunerative enterprises are ignored due to social taboos or other reasons Vegetable cultivation is not only a cheap source of essential nutrients but it also creates more employment opportunities than that of growing other crops such as cereals (AVRDC, 2001) However, vegetable cultivation is limited to the vicinity of cities and comprises only one and two percent of the total cropped area in Pakistan and the Punjab, respectively (Government of Punjab, 2002) as compared to fifteen percent in Taiwan (Ali, 2000) This indicates a low availability of vegetables to consumers Annual per capita consumption of vegetables is extremely low, 35.6 kg/capita/annum in Pakistan compared to 155 kg in Korea while the minimum recommended level is 73 kg/capita/annum (Ali and Abedullah, 2002) Vegetable cultivation is inadequately addressed and given low priority by researchers and research institutes, and as a result the growth of vegetable production in the past decades remained low compared to other crops Now policy makers are realizing the importance of vegetables and research budgets are being allocated to this neglected food frontier The potato is one of the major vegetable crops in Pakistan in terms of area and output volume Potato production plays an important role in the economy of Pakistan in general and that of the Punjab in particular On the one hand, it accounts for 5.71 percent in Technical Efficienc y and its Det er mi n a n t s in Potato Production total vegetable cropped area of the Punjab providing economic benefits and creating employment opportunities for the rural poor On the other hand, it supplements the food consumption of the growing population at lower prices as compared to grains, meat and chicken The data from developed countries indicate that potatoes have 75 percent more food energy per unit area than wheat and 58 percent more than rice Also, potatoes have 54 percent more protein per unit area than wheat and 78 percent higher than rice Therefore, potato consumption is the best alternative to grains to maintain calorie intake It is generally believed that resources in the agricultural sector, especially in under-developed countries are being utilized inefficiently According to our knowledge there exists very little literature dealing with technical inefficiency in vegetable production A large body of literature exists dealing with technical efficiency in major crops, such as cereals (rice, wheat and maize) and cash crops (cotton and sugarcane) and some extended their research to estimate allocative efficiency as well Bravo-Ureta and Pinheiro (1997), Taylor and Shonkwiler (1986), and Shapiro (1983) estimated technical inefficiency between 30-34 percent in the Dominican Republic, Brazilian and Tanzanian agriculture Hussain (1989) estimated 30 and 57 percent technical and allocative efficiency, respectively in Pakistan’s agriculture Ali and Flinn (1989) concluded that the profit of the rice farmers in Pakistan could be increased by 28 percent through improved efficiency Bravo-Ureta and Evenson (1994) found technical and allocative inefficiency to be 40 and 30 percent, respectively in cotton production in Paraguay In spite of the vast literature concentrating on cereals, we did not find much literature exploring efficiency in vegetable production except Wilson et al (1998) and Amara et al (1999) who estimated technical efficiency in potato production in the UK and Canada, respectively The present study will help fill this gap in Pakistan where no such study exists that explores efficiency in vegetable production The main objective of the present study is to estimate technical inefficiency in potato production in 190 So m e s h K Mathur the complaining country to withdraw equivalent trade concessions from the country found at fault These trade sanctions should be defined and administered by the complaining country Moreover, the sanctions are not “stiff financial penalties,” but are simply the withdrawal of trade concessions previously agreed upon In response to criticism being leveled against the dispute settlement understandings (DSUs) own rules and procedures from NGOs, former President Clinton 15 has proposed that “hearings by the WTO be open to the public, and all briefs by the parties be made publicly available and that the WTO provides the opportunity for stakeholders to convey their views… to help inform the panels in their deliberations.” Most WTO members, are expected to resist such a proposal of transparency in the dispute settlement process on the grounds that NGOs should not interfere in the policy decisions of the member states However, now South Asia’s position has moved from the prohibition of consideration to the prohibition of acceptance of unsolicited information, notwithstanding the concern of the lack of equality of parties at all stages of the DSU This latter step by the developing nations may prompt developed nations to offer some leverage in S & D treatment in the DSU Open proceedings and public access to submissions would help private parties with an interest in a dispute to play a more active role in support of the government officials engaged in the litigation It is important to note here that many trade disputes are at their heart not disputes between governments, but rather disputes between private parties with competing economic interests The greater the role that the real parties in interest can play, especially in fact-intensive cases like trade remedy disputes, the easier it will be for governments to focus on the larger policy questions at issue Speech by President Clinton at WTO Ministerial Conference 18 May, 1998 Detailed proposals were tabled by the US and the EU in the General Council on 22 July, 1998 15 A Dev el opi n g Countries Persp e c ti v e 191 Quantification of dispute cases will be an aid to the legal proceedings of the Dispute Settlement process Multilateral trade rules reflect key economic principles such as comparative advantage, and that many of the terms in WTO Agreements, which are important in the resolution of disputes, have an economic basis It may also have to with the fact that increasing numbers of disputes are reaching the implementation phase, in which arbitrators need to quantify the allowable level of retaliation More importantly, developing and least developed nations instead of necessarily insisting on the S & D treatment for costs of litigation, and non compliance, must seize the opportunity to strengthen their cases by garnering support from every member state of the WTO The panel should be mandated to determine the amount of compensation in all cases where measures by developed countries against developing countries are found to violate the WTO rules This will help prevent the initiation of trade-related measures on frivolous grounds by developed countries, and hence will serve an important objective of the dispute settlement process, that is, the prevention of trade disputes Owing to the asymmetric legal powers and economic capacities of developed and developing countries, the former may bring a large number of disputes, some even on frivolous grounds, against the latter There have also been instances where developed countries brought repeated cases, on the same grounds, against developing countries The include: proposals to address these issues should (i) The complainant developed country may be asked to pay the cost of the dispute incurred by the defendant developing country, if the case brought by the former is not maintained by the Panel/Appellate Body 192 So m e s h K Mathur (ii) WTO members may be prohibited from bringing cases against a developing country member once a case on similar grounds involving the same developing country has been decided by a Panel/Appellate Body (iii) The panels and the Appellate Body should be directed to give, to the extent possible, transparent and clear rulings that are less prone to conflicting legalistic interpretations so that once the case is decided it should not be appealed against on similar grounds again The United States, the European Union, and other larger trading entities, to be sure, have some flexibility in ignoring some aspects of WTO law in a particular case They can delay compliance; they can compensate indefinitely; they can shrug off or suspend concessions They can get away with quite a bit But the extent to which they can so is not unlimited Every step they take in the direction of non-compliance does some damage, however minor, to the dispute settlement system and to the WTO Since developed country members have an interest in preserving that system, they have a strong incentive to limit the use of the extra-legal flexibility they may enjoy by virtue of their size and wealth As long as this is the case, the comparative inability of developing country members to impose sanctions will not be a major impediment to their ability to benefit from the dispute settlement system It seems that the Balas text on reforming the dispute settlement process needs further strengthening to make it work for the interest of all; not least of all, the developing countries A Dev el opi n g Countries Persp e c ti v e 193 Ref er e n c e s Blackhurst, Richard, 1997, The WTO and the Global Economy, World Econo m y , Volume 20, No.5, August, pp 527-544 Deardorff, Alan V., 1996, An Economist’s Overview of the World Trade Organization, paper presented for the seventh US-Korea Academic Symposium, “The Emerging WTO System and Perspectives from East Asia”, Ann Arbor, Micigan,28-30 August Horn, H and Mavroidis, P.C (eds.), 2003, The WTO Case Law of 2001, The American Law Institute Reporters’ Studies, Cambridge: Cambridge University Press Keck, A., 2004, ‘WTO Dispute Settlement: What Role for Economic Analysis?, Journal of Industry , Competition and Trade 4, 4: 365-371 Malashevich, B., 2004, ‘The Metrics of Economics As Applied to WTO Dispute Settlement’, presentation made at the Seventh Annual Conference on Dispute Resolution in the WTO, organized by Cameron May, 18 June 2004, Geneva Mathur, Somesh K., 2001, “Domestic Challenges and the TRIPs Agreement: The Way forward for India”, Journal of World Intellect u al Property Right , Geneva, Vol.4, No 3, May Mercurio, Bryan, 2004, Improving Dispute Settlement in the World Trade Organization: The Dispute Settlement Understanding Review-Making it Work?, Journal of World Trade , October, Volume 38, No RIS, 2003, World Trade and Development Report: Cancun and Beyond, New Delhi Sumner, D.A., Barichello, R C and Paggi, M S., 2003, ‘Economic Analysis in Disputes of Trade Remedy and Related Measures in Agriculture, with Examples from 194 So m e s h K Mathur Recent Cases’, Paper presented at the International Conference “Agricultural policy reform and the WTO: where are we heading?”, 23-26 June 2003 WTO Website for Articles and Legal Texts on Dispute Settlement Undertaking The Lahore Journal of Econo mi c s 11 : (Winter 2006) pp 189-191 Boo k Re vi e w Levitt, Steven D., and Stephen J Dubner, Freakon o m i c s: A Rogu e Econo mi s t Explores the Hidden Side of Everyt hin g , Harper Collins Publishers, New York, NY, 2005, pp 356, Price: Hardback $ 27.95 Ever wondered why drug dealers still live with their mothers? Why the United States’ crime rate plummeted to new lows in the 90s? Why did the racist hate group the Ku Klux Klan (KKK) falter as an organized unit in America? What school teachers and sumo wrestlers have in common? “Why” is something Steven D Levitt does not cease to question Levitt along with his amanuensis, Stephen Dubner has written a classic titled, Freakon o m i c s His is a simple two pronged formula: Fielding questions few people dare to ask, followed by mountains of data and rigorous statistical analysis which seem second nature to even those who consider economics a ‘dismal science’ The book deals with economics at the street level and with popular culture Deceptively easy to read, its style so lucid and succinct, its tone so humorous, that it is hard to realize that this book attacks some basic assumptions in life, and in turn raises eyebrows Levitt graduated from Harvard in 1989 su m m a cu m laud e and received a Ph.D in economics from MIT in 1994 Now a chaired professor at the University of Chicago, he recently won the John Bates Clark medal, which is awarded every two years to America’s most promising economist under the age of 40, and is often considered a precursor of a potential Nobel laureate Levitt says that he still can’t understand why he won the medal “I was always puzzled by that I really was I’ve always thought of myself as a 190 Sohaib Shahid kind of a freak, of a dilettante, operating at the fringes of the profession.” The entire purpose of Freakon o m i c s is to reveal counterintuitive and often disturbing truths Levitt puts forward a true picture of the world, and does not care what we want to see in that picture Imparting truth throughout the book, the economist goes on to propound that people respond to economic incentives, which is fairly rational, and that incentives predict human behavior Both Levitt and Dubner go against the one-dimensional theory, so near and dear to purist economists and orthodox social scientists alike – that profit maximization is the sole motivating factor for humankind Giving the concept of incentives a rather out-of-theordinary tinge, the authors observe that in cities with high murder rates, having more police officers does not mean that the officers are causing murders This leads us to further, less intuitive examples For instance, the presence of books in a household seems to be an effect of educated and motivated parents, and thus a good predictor of how their children will perform in school Steven Levitt has something else in store for you: the presence of books he concludes is not a cause; therefore, asking your child to read will not necessarily enhance his/her test score The authors show the precariousness of the drug trade by pointing out that the fatality rate for street dealers is greater than that of inmates on death row in Texas They also demonstrate the power of information, and pay tribute to the internet which has eroded the pricing power of realtors and automobile dealers alike They relate this quality of the internet to the Ku Klux Klan’s demise, which was brought about by an infiltrator who broadcast the group’s secrets, thus making information easy-to-get Levitt not only crusades against conventional wisdom, he violates expert wisdom as well, and at times makes our common sense seem nonsense Levitt and Freakon o m i c s: A Rogu e Econo mi s t Explores the Hidde n Side of 191 Everyt hi n g Dubner try to demolish the common misperception that money leads to success in politics by arguing that, in fact, success attracts money, and not the other way round They say that when big-spending politicians run for reelection against repeat opponents, the results usually reflect those of the previous election As evidence he puts forward Thomas Golisano as an example who has spent $93 million in trying to become Governor of New York, but has never captured more than 14 percent of the vote There is yet another surprise: Swimming pools are much more dangerous to children than guns! In the Unites States, 175 children under 10 got shot and killed each year, whereas around 550 children under 10 drown in their parent’s pool every year, which accounts for one child drowned for 11,000 homes with a pool (there are a lot of residential swimming pools in the US) If there is a flaw, it is the awkward co-authorship of the book and the profuse promotion of Levitt throughout much of the text The book tilts heavily on the article written by Levitt, and every chapter starts with an italicized excerpt from the article, which often raises Levitt to an exalted status This book is not a political or moral philippic Nor does it ask the same questions that your professor at college would ask But caution: Readers might start viewing the world with much more skepticism than before Lahor e Sch o o l of Eco n o m i c s Lahor e So h a i b Sh a h i d Not e s for Auth o r s Manuscripts will be accepted for consideration on the understanding that they are original contributions to the existing knowledge in the fields of Economics, Banking, Current Affairs, Finance, Political Economy, Sociology, and Economic History Manuscripts of research articles, research notes, review articles, comments, rejoinders and book reviews – in English only – should be sent in duplicate to the Editor, The Lahore Journal of Econo m ic s , 105, C-2, Gulberg-III, Lahore-54660 – Pakistan Elec tr o n i c copi e s of th e articl e in Micro s o f t w ord for m a t sh o u l d als o b e su b m i t t e d as an em ail att a c h m e n t to: nin a@l a h o r e s c h o o l e d u p k The first page of the manuscript should have the title of the paper, the names(s) of author(s), and a footnote giving the current affiliation of the author(s) and any acknowledgments Articl e s sub m i t t e d to th e Lah or e Journ al mu s t inclu d e an ab s t r a c t of ab o u t 10 word s th a t su m m a r i z e s th e t e n t s The Lahore Journal will publish empirical papers only if the data used in the analyses are clearly and precisely documented and are readily available to the journal reviewer for purposes of replication At the time of submission of papers that have empirical work, authors must provide to the Lahore Journal , the data in Microsoft EXCEL format required for the replication of results Detailed derivations of any main mathematical results reported in the text should be submitted separately along with the articles Each manuscript should be typed and should carry a margin of an inch and a half on the left-hand side and an inch on the right hand side of the typed page The graphic format for each mathematical formula, diagram, figure or chart should be in text mode for further editing Tables for the main text and each of its appendices should be numbered sequentially and separately The title of each table should clearly describe the contents The source of the table should be given in a footnote immediately below the line at the bottom of the table 10 Footnotes should be numbered sequentially 11 All references used in the text should be listed in alphabetical order of the authors’ surnames at the end of the text References in the text should include the name(s) of author(s) with the year of publication in parentheses, and all references should conform to the style of the Journal Further information on questions of style may be obtained from the Co-Editor, The Lahore Journal of Econo m ic s , Lahore – Pakistan 12 Book Reviews should give a description of the contents and a critical evaluation of the book It should not exceed or typewritten pages 13 Each author will receive two complimentary copies of The Lahore Journal of Econo m ic s T HE LAHORE JOURNAL OF ECONOMICS Lahore School of Economics 105-C-2, GULBERG III LAHORE, PAKISTAN TEL: 5714936 FAX: 5714936 SUBSCRIPTION FOR PUBLICATIONS Kindl y en t e r a su b s c r i p t i o n for th e foll o w i n g pu b l i c a t i o n of th e Lah or e Sch o o l of Econ o m i c s : Pu bl i c a t i o n Yearl y su b s c r i p t i o n Yearl y su b s c r i p t i o n Peri o d Tot a l (within Pakistan) (outside Pakistan) (No of years) Pay m e n t The Lahore Journal ………… Rs 600.00 US $ 50 … of Economics Th e su b s c r i p t i o n ad d r e s s : Name: is to b e in th e foll o w i n g na m e an d Address: -3 A cro s s e d ch e q u e / d e m a n d draft for th e su m of Pakis t a n Rup e e s / U S $ is en cl o s e d mad e out in th e nam e of The Lahor e Sch o ol of Econ o m i c s to cov er th e abo v e su b s c r i p t i o n Pl e a s e ad d r e s s you r ord e r to: Nin a Ger a , Pu bli c a t i o n s , Lah or e Sch o o l of Econ o m i c s , - 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Cobb-Douglas is a special form of the translog production function where the coefficients of the squared and interaction terms of input variables are assumed to be zero In order to select the best specification for the production function (Cobb-Douglas or translog) for the given data set, we conducted hypothesis tests for the parameters of the stochastic production frontier model using the generalized likelihood-ratio... implies that the extension department should be one of the major targeted variables from the policy point of view in order to improve technical efficiency in potato production Hence, there is a need to strengthen the role of the extension department in the crop sector and to make its role more effective Due to a lack of extension services and their effective role, we find that farmers also discuss their crop... consulted then Z 4i = 1 otherwise zero Z 5i = Consultation with input dealers i.e if consulted then Z 5i = 1 otherwise zero Z 6i = Area allocated to potato production 4 Re s u l t s an d Dis c u s s i o n Ste p 1 Results: Selection of the Cobb- Douglas Production Function We tested the hypothesis whether the Cobb-Douglas production function is an adequate representation of the data using equation 8, given the. .. Comparisons of European and U.S Air Carriers: A First Look at the Data Journal of Productivity Analysis 4(1/2): 115–25 Government of Pakistan, 2003, Eco n o mic S ur v e y Pakis t a n 2 0 0 2-0 3 , Finance Division, Islamabad of Government of Punjab, 2002, Punjab Development Statistics, Bureau of Statistics, Government of the Punjab, Lahore Green, W.H., 2000, Simulated Likelihood Estimation of the Normal-Gamma... socio-economic characteristics of the farmers, input-output quantities, and management practices Marketing data, collected from the farmers as part of the production survey includes information about the output disposal pattern, packing material and marketing cost Data on the production constraints of potato production were also gathered The mean value of household related variables (age, years of education, and