Cobb Douglas production function with composite error term in egg laying enterprise in Akwa Ibom state, Nigeria

Abstract

The study tried to estimate the profit efficiency and the relevant indices determining efficiency levels for egg-laying industry in Akwa Ibom State, Nigeria utilizing Cobb-Douglas production function based on stochastic profit frontier. Sixty poultry farms were randomly selected across the six agricultural zones of the state. Primary data were collected with the aid of a structured questionnaire. Empirical results revealed the mean economic efficiency of 65.00% implying the need for increased resource use efficiency The results further showed that variable inputs such as price of feeds, price of drugs and medication were statistically significant (p<0.05) thus indicating that profit decreased with increase in input prices while fixed inputs such as capital inputs and farm size were statistically significant and had the right sign a-priori indicating that profit increased with increase in the level of its utilization. The maximum economic efficiency level attained by an individual farmer was 88.00% indicating that there was room for improvement. The study therefore suggests that policy that would enhance extension services, encourage membership in cooperative farming and enhanced good and adequate utilization of improved livestock inputs should be put in place.

Key words: Egg, Cobb- Douglas, profit function, egg laying enterprise, Nigeria.