Journal of
Development and Agricultural Economics

  • Abbreviation: J. Dev. Agric. Econ.
  • Language: English
  • ISSN: 2006-9774
  • DOI: 10.5897/JDAE
  • Start Year: 2009
  • Published Articles: 527

Full Length Research Paper

An analysis of allocative efficiency of shea butter processing methods in the northern region of Ghana

Haruna Issahaku1*, Al-hassan Ramatu2 and Daniel B. Sarpong2
1Department of Economics and Entrepreneurship Development, Faculty of Integrated Development Studies, University for Development Studies, Box 520, Wa, Upper West Region, Ghana. 2Department of Agric. Economics and Agribusiness, College of Agriculture and Consumer Sciences, University of Ghana Legon, Ghana.
Email: [email protected]

  •  Accepted: 26 March 2011
  •  Published: 30 April 2011

Abstract

This study estimated and compared the allocative efficiencies of the traditional, improved shea butter processing technology (ISBPT) and the bridge press (BP) methods of shea butter processing. Data were collected from 110 shea butter processors. Allocative efficiency estimates were obtained using the marginal product approach. The allocative efficiency indices for labour indicate that while labour input is over utilised in the traditional method, it is under utilised in the ISBPT and BP methods. The allocative efficiency indices for capital, show that capital input is over utilised in the traditional and ISBPT methods though the extent of over utilization is greater for the ISBPT method. Processors require training to build their entrepreneurship capacities to ensure their resource use efficiency.

 

Key words: Allocative efficiency, constraints labour, capital, marginal value product.