TECHNICAL EFFICIENCY, MANAGERIAL ABILITY AND FARMER EDUCATION IN GUATEMALAN CORN PRODUCTION: A LATENT VARIABLE ANALYSIS

In this study it is argued that conflicting empirical results on the relationship between technical efficiency and education may be in part attributed to difficulties in the measurement of key variables. Calculation of technical efficiency with three alternative frontier methods for a sample of Guatemalan corn farms resulted in significant differences both in the average technical efficiency of the sample and the efficiency rankings of individual farms. Furthermore, following two-step procedures where technical efficiency is regressed against a set of explanatory variables, it is shown that the choice of efficiency measurement technique can alter the importance of education as a contributing factor to increased technical efficiency. An alternative approach is presented for investigating the relationship between education and efficiency while accounting for difficulties in the measurement of conceptual variables and measurement errors.