Measuring technological gap ratio of wheat production using StoNED approach to metafrontier

Abstract The aim of this paper is to use the concept of the metafrontier function to study the determination of efficiency differentials and Technological Gap Ratio (TGR) on wheat production in Khorasan Razavi province. In this study, we used the metafrontier function and group frontier based on the concept of Stochastic Nonparametric Envelopment of Data analysis (StoNED). The data used in this study consisted of a sample of 435 wheat farms in 2011. The data samples collected from wheat farms are divided into three sizes namely small, medium and large farms. The results of estimating group frontier production functions indicate that the mean technical efficiency (TE) for small, medium and large farms are 0.426, 0.606 and 0.365, receptively. The figures were found to be mean TE for small, medium and large farms are 0.286, 0.239 and 0.248 when evaluated based on the metafrontier production function representing that the highest mean TE is devoted to small farms, while medium farms has the lowest mean technical efficiency. The average technological gap ratios for small, medium and large farms were 0.727, 0.463 and 0.725, respectively. Therefore, the medium farms frontier has the most distant to the metafrontier, while the small and large farm frontiers have the closest.