Stochastic Frontier Model and Factors Influencing Seed Cotton Production Cost

Abstract

For this analysis, we used survey data from the China Academy of Agricultural Sciences Cotton Research Institute for 1253 China seed cotton producers, employing the framework of a stochastic frontier trans-logarithmic cost function of cross-sectional data. Our findings showed that China seed cotton producers are almost in full efficiency. However, the assumption that farmers minimize cost was not supported by the sample data. Further, both the economic factors related to farm size that might affect the cost of producing seed cotton and the negative externalities that could affect environmental management over short and long durations were captured.