Journal of Agricultural Economics

doi: 10.1111/1477-9552.12275

Tenure Security and Farm Efficiency

Analysis Correcting for Biases from
Observed and Unobserved Variables:
Evidence from Benin
Kotchikpa G. Lawin and Lota D. Tamini1
(Original submitted August 2017, revision received December 2017, accepted
February 2018.)

Abstract
We analyse the impact of land tenure security on the technical efficiency of a sam-
ple of smallholder farmers in Benin, based on an output-oriented stochastic dis-
tance function. We use propensity score matching to correct for selection bias from
observed variables. The Greene (2010) sample selection model is used to correct
for selection bias due to unobserved variables. We estimate meta-frontiers to anal-
yse agricultural productivity and efficiency differences between landowners and
non-owners. Our results show that non-owners have consistently higher levels of
technical efficiency and productivity.

Keywords: Benin; meta-frontier; output distance function; sample selection; techni-

cal efficiency; tenure security.
JEL classifications: C31, D24, Q12, Q15.

1. Introduction
In Benin, agriculture is the primary source of income for rural households. It gener-
ates approximately 70% of total jobs, provides 70–80% of total export earnings and
contributes to 15% of government revenues (FAO, 2012). The agricultural sector in
Benin is dominated by small farms with an average size of 1.7 hectares (MAEP, 2008).
Farmers produce several crops to ensure their food security and their non-food needs
using cash crops as a source of income. Smallholder farmers face increasing chal-
lenges. The most important is declining production, which leads to decreased agricul-
tural incomes and threats to food security (MAEP, 2011; FAO, 2012). Hence,

1
Kotchikpa Lawin and Lota Tamini are both in the Department of Agricultural Economics
and Consumer Sciences and Center for Research on the Economics of the Environment, Agri-
food, Transports and Energy (CREATE), Laval University, Quebec City, Canada. Email:
kotchikpa-gabriel.lawin.1@ulaval.ca for correspondence. The authors thank Dr. Alphonse
Singbo and three anonymous referees for their comments that improved this paper. The data
used in this study were obtained from the World Bank, and this is gratefully acknowledged.

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2 Kotchikpa G. Lawin and Lota D. Tamini

promoting the productive and efficient use of farmland is an important policy for food
security and poverty alleviation in Benin. Because of its potential to enhance agricul-
tural productivity/efficiency, land tenure security is among the top priorities of the
economic development agenda of the Government of Benin and international devel-
opment agencies such as the World Bank.
There is a consensus that secure land property rights should have a positive impact
on agricultural productivity and efficiency. Economic theory identifies three routes
through which securing property rights may influence agricultural productivity and
efficiency. First, property rights provide an incentive to make long-term land invest-
ment and to adopt new technologies (Besley, 1995; Deininger and Jin, 2006; Goldstein
and Udry, 2008). Secondly, secured land rights make it easier to use land as collateral
to obtain loans to finance agricultural investments (Feder and Feeny, 1991). Finally,
secure property rights are also thought to influence agricultural productivity because
they encourage more efficient resource use (Ghebru and Holden, 2015), termed the
‘factor intensity effect’. Clear ownership lowers the cost and risk of transferring the
land, which improves factor intensity through reallocation of land from the less to
the more efficient farmers (Abdulai et al., 2011; Ali et al., 2011; Ghebru and Holden,
2015).
However, the empirical, relationship between land tenure security and agricultural
productivity remains ambiguous. Some studies in Ethiopia and the Philippines find
that tenure security has a positive impact on farm efficiency (Ahmed et al., 2002; Ghe-
bru and Holden, 2015; Koirala et al., 2016). By contrast, other studies in Rwanda,
Ghana, Kenya, Uganda and Ethiopia find no evidence of efficiency differences across
different bundles of land rights (Place and Hazell, 1993; Gavian and Ehui, 1999; Hunt,
2003 Pender et al., 2004). In addition, studies made in China suggest a negative
impact of tenure security on technical efficiency (Feng, 2008; Ma et al., 2017). The sig-
nificant heterogeneity in the results of empirical literature may be related to the local
context and the conditions within which tenure systems operate (Place, 2009).2 New
empirical studies in different contexts may improve understanding of the impact of
tenure security on agricultural productivity and technical efficiency.
To the best of our knowledge, there are no previous studies in Benin regarding the
impact of land rights on the technical efficiency (TE) of smallholder farmers. Further-
more, the analysis of the impact of customary land rights is sparse in the literature,
where most developing countries are characterised by customary land tenure systems
(Goldstein et al., 2015).
In Benin, land tenure is mainly governed by a customary tenure system where indi-
vidual farming households privately own land and inheritance of full ownership
remains the dominant land tenure arrangement. However, other types of land tenure
arrangements also exist, and include borrowing, renting and sharecropping, where
borrowing refers to an individual farmer operating a land parcel on a temporary
basis, without directly paying a fee to the landlord.3
The majority of previous studies have examined specific agricultural commodity
chains without taking into account the diversity of farm production and the overall

2
Place (2009) provides a good overview of the theoretical literature related to the impact of land
tenure on productivity and efficiency.
3
In some cases, a payment is made to acknowledge the landowner’s nominal control over the
land. However, the payment is largely symbolic.

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 Tenure security and farm efficiency 3

farming system. Furthermore, measurement errors may bias the results. For example,
when a farm is not specialised, it is difficult to determine the share of labour allocated
to a particular crop, especially in the case of multi-cropping. It is also necessary to
consider biases from unobserved variables. Recent literature on stochastic frontier
production (SFP) functions has shown that the choice of production technology could
be endogenous. These potential biases need to be taken into account when estimating
technical efficiency (TE) scores (Kumbhakar et al., 2009; Greene, 2010; Bravo-Ureta
et al., 2012; Wollni and Br€ ummer, 2012; Kathuria et al., 2013). The land property
rights of the farmer influence the choice of production technology and vice-versa as
shown by Abdulai et al. (2011), Besley (1995), Brasselle et al. (2002), Place and
Otsuka (2001), among others. Therefore, without correcting for endogeneity, it is diffi-
cult to get unbiased estimates of the real impact of property rights on technical effi-
ciency. However, few studies take these issues into account when analysing the
relationship between property rights and technical efficiency. Recent studies (Gavian
and Ehui, 1999; Ahmed et al., 2002; Feng, 2008; Michler and Shively, 2014; Ghebru
and Holden, 2015 and Koirala et al., 2016) did not account for biases stemming from
endogeneity.
Our objective is to examine the impact of land tenure security (proxied by full own-
ership) on the technical efficiency and productivity of smallholder farmers in Benin
using an output distance function. Our study differs from previous studies in several
respects. First, we account for the multiplicity of outputs that characterise small-scale
farms in Benin. Second, we add to the literature related to the control of selection bias
on observable and unobservable variables when using cross-sectional data. Indeed,
the majority of the empirical studies that have examined the relationship between
property rights and technical efficiency have not accounted for the double correction
of endogeneity and selection bias on observed characteristics. We corrected the selec-
tion biases on unobserved characteristics using the approach developed by Greene
(2010) and corrected for the selection bias on observable variables using propensity
score matching.
Third, we estimate meta-frontiers to generate a common technology that enables
direct comparison of TE between landowners and non-owners and disentangle the
effects of tenure security on technology gap (difference in the production frontier) and
managerial ability (difference in technical efficiency). Fourth, our analysis used data
that cover a large sample of agricultural households randomly selected from all agro-
ecological zones in Benin.
The remainder of this paper is divided into four sections. First, the methodological
approach is discussed. Second, descriptive statistics and the data used in the analysis
are presented. Third, we present and discuss the results of our econometric estimates.
Finally, we conclude and draw policy implications.

2. Methodological Approach
Our methodology is based on output-oriented distance functions (ODF). The ODF
describes a multi-input, multi-output production technology without making beha-
vioural assumptions (such as cost minimisation or profit maximisation). The ODF
predicts the maximum increase in the output while keeping the input vector constant.
Other important advantages of ODF are that they do not require price data and they
estimate the production frontier without assuming the separability of inputs and out-
puts (Kumbhakar et al., 2003; Das and Kumbhakar, 2012).

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4 Kotchikpa G. Lawin and Lota D. Tamini

2.1. Output distance function

Following Coelli et al. (1998), Coelli and Perelman (2000), Coelli et al. (2005) and
Shephard (1970), the ODF can be expressed as follows:

 
1
Dðx; yÞ ¼ min
g g [ 0 : x; y 2 YðxÞ ð1Þ
g
where
yðxÞ ¼ fy 2 RM
þ : x 2 Rþ ; can produce yg:
k

Y (x) represents the vector of output, y 2 RM þ the production set, x 2 Rþ the input
k

vector and the scalar g is the proportional expansion of the output vector with the
input vector held fixed. D(x, y) is non-decreasing, positively linearly homogenous and
convex in y, and non-increasing in x (Shephard, 1970; Coelli et al., 2005). The ODF
will take a value that is less than or equal to one if the output vector, y, is an element
of the feasible production set, Y(x). In addition, D(x, y) will take a value of unity if y
is on the frontier of the production possibility set.

2.2. Empirical specification and estimation

The ODF in equation (1) is approximated by a translog functional form. It is a func-
tion of all crops produced and all inputs used in the production process. That is,
X
M
1X M X M XK
ln Di ¼ a0 þ ap gðxÞ þ am ln ymi þ amn ðln ymi Þðln yni Þ þ bk ln xki
m¼1
2 m¼1 n¼1 k¼1

1 X
K X
K K X
X M
þ bkl ðln xki Þðln xkl Þ þ dkm ðln xki Þðln ymi Þ; i ¼ 1; . . .; N
2 k¼1 l¼1 k¼1 m¼1
ð2Þ
th
In equation (2), i represents the i farmer in the sample. In ym is the logarithm of
crop production, ym, and In xk is the logarithmic value of the quantity of input used
by the farmer. g(.) represents a set of binary variables including the producer’s land
ownership, adoption of agro-environmental practices4 and soil types. Agro-environ-
mental practices and soil types were included in the ODF to account for heterogene-
ity. The condition of homogeneity of degree +1 in output requires the following
restrictions:
X
M
P
M P
M
am ¼ 1; amn ¼ amn ¼ 0; m; n ¼ 1; 2; . . .; M:
m¼1 m¼1 n¼1

ð3Þ
X
M
dkm ¼ 0; k ¼ 1; 2; . . .; K :
m¼1

4
The agro-environmental practices include fallowing, agroforestry and adoption of soil or con-
servation practices of water resource (plot levelling, cover crop planting, strip cropping, stone
terraces, soil bunds).

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 Tenure security and farm efficiency 5

The symmetric constraint implies:

amn ¼ anm ; m; n ¼ 1; 2; . . .; M; bkl ¼ blk ; k; l ¼ 1; 2; . . .; K: ð4Þ
The homogeneity condition of degree +1 in the outputs implies that:
Di ðxki ; kymi Þ ¼ kDi ðxki ; ymi Þ ð5Þ
Following Coelli and Perelman (2000), we assume that k = 1/yMi with yMi being the
quantity of the harvest of any crop. By assuming that –ln Di = ui and by adding vi, a
symmetric error term (Coelli and Perelman, 2000) we can transform equation (2) into
a stochastic frontier function to obtain the following:
X
M 1
1MX X
1 M 1
 ln yMi ¼ a0 þ ap gðxÞ þ am lnðymi =yMi Þ þ amn ðln ymi =yMi Þðln yni =yMi Þ
m¼1
2 m¼1 n¼1
X
K
1X K X K X X
K M1
þ bk ln xki þ bkl ðln xki Þðln xkl Þ þ dkm ðln xki Þðln ymi =yMi Þ
k¼1
2 k¼1 l¼1 k¼1 m¼1

þ v i  ui :

ð6Þ
We assume that vi : iid=Nð0; r2v Þ
and is independent of ui, which represents the
technical inefficiency term of each farmer (ruv = 0). We also assume that ui is a
non-negative variable, truncated to zero, with a half-normal distribution,
ui : iid=Nþ ð0; r2u Þ.
The technical inefficiency term, ui, can be specified as follows:
ui ¼ z i u þ w i ð7Þ
Z is a set of exogenous variables that explain differences in the technical effi-
ciency between farms, / is the vector of associated parameters, and w the error
term.
The literature regarding land tenure provides evidence that land property rights,
farm investment and productivity are endogenous. Furthermore, Greene (2010) shows
that in the presence of endogeneity, the estimate of the technical efficiency score using
the conventional method is biased. He proposes a selection model with two simultane-
ous equations: a selection equation and a SFP function equation. Greene (2010)
assumes that unobserved characteristics in the selection equation are correlated with
the error term in the SFP function.

Selection equation : di ¼ 1½a0 zi þ wi [ 0; wi : N½0; 1 ð8Þ

0
SFP function : yi ¼ b Xi þ ei ; ei : N½0; re  ð9Þ
: ðyi ; Xi Þ are observed only when di = 1
Error structure : ei ¼ vi  ui ð10Þ
: ui ¼ jru Ui j ¼ ru jUi j; where Ui : N½0; 1
: vi ¼ rv Vi ; where Vi : ½0; 1
  
: ðwi ; vi Þ : N2 ð0; 1Þ; 1; qrv ; r2v .

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6 Kotchikpa G. Lawin and Lota D. Tamini

where d is a binary variable that takes the value of 1 for landowners and 0 for
non-owners, y is output, z is a vector of explanatory variables in the sample selection
equation, x is a vector of explanatory variables in the ODF frontier. The parameter q
indicates the presence or absence of selection bias, while a and b are the parameters to
be estimated and the error structure corresponds to that in the stochastic frontier
model.
The implementation of the Greene selection model (2010) requires estimation of the
likelihood that the farmer will exhibit full property rights to agricultural land. We
modelled land ownership as a function of exogenous variables as follows:
X
8
di ¼ a0 þ aj Zji þ fi ð11Þ
j¼1

where d is a binary variable that represents the likelihood that the farmer owns land
(the value of d is 1 for landowners and 0 for non-owners).5 Z is a vector of exogenous
variables including household head’s characteristics (age, sex, education, ethnic
group), farm size per hectare per person in the household and annual household
off-farm income, and a is the vector of associated parameters. The error term is repre-
sented by f, which has a distribution N (0, r2). The selection of the exogenous vari-
ables (included in Z) is based on previous empirical studies of customary land tenure
regimes. According to Holden and Yohannes (2002), household wealth variables
(farm size per capita, household off-farm income) may reduce tenure insecurity and
hence influence land tenure choices. Under customary land tenure regimes, womens’
land rights are weaker than those of men (Quisumbing et al., 2001; Place, 2009) and
therefore the gender of the household head is a potential determinant of land tenure.
The effect of the age of the household head on tenure is ambiguous (Holden and
Yohannes, 2002). Several studies conducted in various socio-economic contexts in
sub-Saharan Africa also found strong correlation between ethnicity and the types of
land property rights held by smallholder farmers (Neef and Heidhues, 1994; Bekele
and Drake, 2003; Boone, 2007).
Equation (11) was estimated using a Probit model. Greene (2010) explains that the
distance function is observed when d = 1. Thus, for the subsample where d = 1, we
used equation (6) to estimate the distance function for landowners. The same proce-
dure used to estimate the selection model was used for non-owners where the depen-
dent variable in equation (11) is 1 for non-owners, and 0 for landowners.
To avoid convergence problems, output and input variables have been divided by
their geometric mean (Cuesta et al., 2009). The first-order coefficients can be inter-
preted as elasticities evaluated at the sample mean. Moreover, to account for the
numerous zero values in inputs and outputs, we followed Battese (1997) and replaced
the original values of inputs and outputs as follows:
Qki ¼ maxðQki ; Vki Þ ð12Þ

5
Although in practice farmers may have a mixture of owned and rented/tenanted plots, for sim-
plicity we proxied landowners by household that owns all its cultivated plots. In the sample, less
than 1% of households have mixed tenure.

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 Tenure security and farm efficiency 7

where Vki is a binary variable defined as follows:

Vki ¼ 1 si Qki ¼ 0 et Vki ¼ 0 si Qki [ 0: ð13Þ
We use the propensity score matching technique (PSM) to correct for selection bias
from observed variables. Thus, to arrive at the TE measures that come from models
that have been corrected for biases from both observable and unobservable variables,
and following the Bravo-Ureta et al. (2012) and Gonzalez-Flores et al. (2014)
approach, we estimate a series of models, including a ‘traditional’ unmatched pooled
sample model with land tenure (binary) as an explanatory variable. However, we
focus on (i) a matched sample pooled model (P-M), with tenure as an independent
variable, which corrects for selection bias from observable variables; (ii) two ODF
models, one for landowners (L-M-S) and one for other farmers (N-M-S), using the
Greene sample selection model (2010), which corrects for selection biases from both
observable and unobservable variables.

2.3. Performance measures

2.3.1. Technical efficiency
The technical efficiency (TE) of farmer i is measured following Jondrow et al. (1982)
and Battese and Coelli (1988) as:
TEi ¼ E½expðui Þjei  where ei ¼ vi  ui ð14Þ
using the conditional mean of exp (–ui), given the error term of the stochastic distance
function, vi – ui, and evaluated using the estimated parameters of the ODF.

2.3.2. Input elasticities

The input elasticities are calculated from the partial derivatives of the equation of the
ODF:
@ ln D XK XM
ek ¼ ¼ bk þ bkl ln xl þ dkm ln ym : ð15Þ
@ ln xk l¼1 m¼1

2.3.3. Scale economies

The elasticity of scale (ES) in a multi-output distance function measures the propor-
tional increase in outputs following a proportional increase in all inputs, for farmer i
(F€are and Primont, 1995):
" #
XK
@ ln Di ðxki ; ymi Þ
ESi ¼  ð16Þ
k¼1
@ ln xki

When the value is greater (less) than one, the farm operates under increasing (de-
creasing) returns to scale.

2.4. Meta-frontier technology gap and technical efficiency

We estimate a meta-frontier that envelops the deterministic component (Villano et al.,
2015) of the owners and non-owners for the sample selection models using the
matched sample. The meta-frontier is defined as:

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8 Kotchikpa G. Lawin and Lota D. Tamini


y ¼ fðxi ; b Þ ¼ exi b ð17Þ
where y* is the meta-frontier output, b* denotes the vector of parameters such that
xib* ≥ xibj and bj are parameters obtained from the owner and non-owner group
frontiers. The meta-technology gap ratio (MTR) is calculated as the ratio of the high-
est attainable group output to the highest possible meta-frontier output (Villano
et al., 2015) as:

e xi b
MTR ¼ 1: ð18Þ
e xi bj
The technical efficiency with respect to the meta-frontier (MTE) is then calculated
as:
MTE ¼ TEj  MTRj ð19Þ
We use the parametric stochastic frontier framework proposed by Huang et al.
(2014). This method allows us to separate the random shocks from the technology
gaps, which is an advantage over the programming approach. Specifically, the pre-
dicted values of the output obtained from the estimates of the group-specific frontier
are pooled to estimate the meta-frontier.

3. Data and Descriptive Statistics

The data were obtained from a random sample of 2,873 agricultural households, col-
lected between March and April 2011 as part of the Impact Evaluation of the Rural
Land Development Project (PFR) that included 291 villages randomly selected in nine
departments of Benin. Our empirical analysis is done at the household level. Farming
households have relatively diversified crop portfolios (see Table A1, Figure A1 and
Figure A2 in the online Appendix). Our sample households grow an average of two
different crops and cultivate fewer than two plots.
To avoid too many zeros and to reduce the number of output variables, we group
the outputs into three categories in the multi-input multi-output model. The reference
output (yMi) used to generate the output ratios is the quantity (in kg) of grain produc-
tion. The other outputs (ymi) are the production (in kg) of roots and tubers and other
crops (fruits, vegetables and cash crops). The tenure security variable is binary taking
the value 1 if the household own all its cultivated plots, and 0 otherwise.6
We include five types of inputs: labour, land, seed, fertiliser and pesticides. The
labour input is measured by person-days used by the household during the farming
season. This includes family labour, hired labour and shared labour. The land input is
the total hectares cultivated. The quantities of seed, fertiliser and pesticide used during
the farming season are in measured in kilograms. Table 1 presents the variables used
in the stochastic distance function.
To model technical inefficiency, we use household size (SIZE), socioeconomic char-
acteristics of the household head and farm characteristics (Table 2). Socioeconomic
characteristics include age (AGE), education (EDUC), sex (SEX), and membership of
a farmer organisation (MOP). Farm characteristics include the type of soil, as
described in Table 1, the proportion of household managed plots near and further
away from the homestead (DLOGI) and distance from the nearest market (DMAR).

6
Less than 1% of the sample has a mixture of owned and rented/tenanted plots.

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 Tenure security and farm efficiency 9

Table 1
Definition of variables of the distance function

Variable Parameter Unit of measure Definition

TVCP Kilogram Total quantity of grain production

TVRP a1 Ratio Total quantity of roots and tubers production/Total
quantity of grain production
TVAP a2 Ratio Total quantity of other products/Total quantity of
grain production
LAND b1 Hectare Total land devoted to agricultural production
LABO b2 person-day Total quantity of labour used
SEED b3 Kilogram Total quantity of seed used
FERT b4 Kilogram Total quantity of fertiliser used
PEST b5 Kilogram Total quantity of pesticide used
TSOL1 aSOL1 % Proportion of plot with Lateritic/red soil
TSOL2 aSOL2 % Proportion of plot with Hydromorphic soil
TSOL3 aSOL3 % Proportion of plot with ferralitique soil
TSOL4 aSOL4 % Proportion of plot with other type of soil
ADOPT aADOPT Dummy 1 if the household has adopted agri-environmental
practices
BTREAT aBTREAT Dummy 1 if the household owns 100% of the cultivated land

We include the number of plots managed by the household (NPCEL) and the average
size of the household managed plots (TPCEL). The number of plots managed by the
household, average plot size and average distance of the plots from the homestead
were used to account for the impact of land fragmentation on TE, which might be
positive or negative, depending on the extent to which operational inefficiencies are
offset by agro-environmental advantages. Average plot size is expected to have a posi-
tive impact on TE. Larger distances to plots are expected to have a negative impact
on TE.
Our PSM method follows Bravo-Ureta et al. (2012) and Gonzalez-Flores et al.
(2014), using the 1-to-1 nearest neighbour without replacement method while impos-
ing the common support condition. The matching used characteristics intrinsic to the
household head (age, gender, education, ethnic group, membership in farmer organi-
sation), household size, total area of land cultivated by the household, the average dis-
tance from the household-managed plots to the nearest market and to the homestead,
household off-farm income and a dummy variable for the adoption of agro-environ-
mental practices. Our matching procedure produced 1,038 pairs of households (i.e.
1,038 landowners and 1,038 non-owners). To test the quality of the matches, we per-
formed t-tests on the mean of the variables in the stochastic distance function model
before and after matching. The results are shown in Table A2 in the online Appendix.
They show that for most variables, after matching, the difference in observable char-
acteristics between landowners and non-owners is not statistically significant. Fig-
ure A3 (online Appendix) shows the density estimates of the distribution of
propensity scores with and without common support. As expected, there are many
observations of common support amongst landowners.

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10 Kotchikpa G. Lawin and Lota D. Tamini

Table 2
Description of variables in the technical inefficiency term

Variable Parameter Unit of measure Definition

AGE /1 Years Age of the household head

SEX /2 Dummy 1 if household head is a female
EDUC /3 Dummy 1 if household head can read and write
MOP /4 Dummy 1 if household head is member of a farmer
organisation
HSIZE /5 Number Number of members of the household
DLOGI1 /6 % Proportion of plot located at 30–60 minutes from the
dwelling
DLOGI2 /7 % Proportion of plot located more than one hour from
the dwelling
DMAR /8 % Proportion of plot located more than one hour from
a market
NPCEL /9 Number Number of plots operated by the household
TPCEL /10 Hectare Average plot size
TSOL1 /SOL1 % Proportion of plot with Lateritic/red soil
TSOL2 /SOL2 % Proportion of plot with Hydromorphic soil
TSOL3 /SOL3 % Proportion of plot with ferralitique soil
TSOL4 /SOL4 % Proportion of plot with other type of soil

4. Results and Analysis

4.1. General results
Table 3 shows the maximum-likelihood estimates for the matched samples. In all
models, the first-order coefficients of the output ratios (TVRP and TVAP) are positive
and significant, implying that the ODF is non-decreasing in output. Moreover, all
show that the distance function decreases when inputs increase.
The coefficient of adoption of agro-environmental practices variable is not signifi-
cant for most models. However, the coefficient is positive and statistically significant
at the 1% level in the meta-frontier model, implying a negative effect on the meta-
frontier. Similarly, our soil type variables are only significant for the meta-frontier.
The BTREAT (ownership) variable is positive and significantly different from zero
at 5% in the conventional model (P-M), suggesting that tenure has a positive produc-
tion effect. To test the robustness of this result, we also estimated separate conven-
tional stochastic ODF models, one for landowners and one for non-owners (see
Table A3 in online Appendix). The likelihood ratio test of equality of coefficients
between the two stochastic distance functions confirmed that the stochastic distance
functions of landowners and non-owners are different.
The estimated selection models show that the selection variable RHO (x, v) is statis-
tically significant for non-owners (Table 3), suggesting the presence of selection bias
on unobserved variables and lending support to the use of a sample selection frame-
work to estimate separate stochastic ODFs for landowners and non-owners. More-
over, in the presence of selection bias, the use of the conventional method leads to
biased estimates of the parameters of the stochastic distance function, which affects

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 Table 3
ML estimates for the conventional and sample selection ODF models: matched sample

Conventional model Sample selection models

Pooled Landowners Non-owners

(P-M) (L-M-S) (N-M-S) Metafrontier

Variables Coeff SE Coeff SE Coeff SE Coeff SE

Constant 1.471*** 0.060 0.722 0.764 0.944*** 0.342 0.946*** 0.013

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TVRP 0.240*** 0.010 0.145*** 0.014 0.140*** 0.013 0.141*** 0.001
TVAP 0.517*** 0.012 0.297*** 0.017 0.358*** 0.019 0.335*** 0.002
TVRP*TVRP 0.072*** 0.003 0.024*** 0.005 0.014*** 0.005 0.015*** 0.001
TVAP*TVAP 0.087*** 0.003 0.023*** 0.005 0.049*** 0.005 0.033*** 0.001
TVRP*TVAP 0.091*** 0.002 0.054*** 0.004 0.052*** 0.003 0.051*** 0.000
LAND 0.028 0.021 0.212*** 0.037 0.217*** 0.041 0.225*** 0.004
LABO 0.106*** 0.024 0.239*** 0.048 0.241*** 0.045 0.245*** 0.004
SEED 0.091*** 0.019 0.194*** 0.031 0.175*** 0.036 0.180*** 0.004
FERT 0.071*** 0.019 0.110*** 0.040 0.131*** 0.035 0.131*** 0.005
PEST 0.155** 0.072 0.256* 0.150 0.135 0.119 0.118*** 0.014
LAND*LAND 0.056** 0.027 0.090** 0.041 0.062 0.043 0.088*** 0.006
LABO*LABO 0.033 0.033 0.053 0.057 0.061 0.061 0.069*** 0.007
Tenure security and farm efficiency

SEED*SEED 0.032* 0.019 0.068** 0.030 0.06015* 0.032 0.07391*** 0.004

FERT*FERT 0.045*** 0.017 0.043 0.030 0.059** 0.029 0.065*** 0.003
PEST*PEST 0.076 0.096 0.127 0.161 0.066 0.139 0.033* 0.017
LAND*LABO 0.018 0.022 0.060* 0.035 0.070** 0.035 0.061*** 0.003
LAND*SEED 0.028 0.019 0.049* 0.025 0.028 0.027 0.047*** 0.003
LAND*FERT 0.010 0.010 0.041** 0.018 0.023 0.015 0.003* 0.002
LAND*PEST 0.105** 0.041 0.116 0.076 0.018 0.068 0.068*** 0.008
LABO*SEED 0.023 0.015 0.051* 0.027 0.023 0.031 0.030*** 0.004
11
 12

Table 3
(Continued)

Conventional model Sample selection models

Pooled Landowners Non-owners

(P-M) (L-M-S) (N-M-S) Metafrontier

Variables Coeff SE Coeff SE Coeff SE Coeff SE

LABO*FERT 0.021 0.013 0.022 0.020 0.003 0.020 0.001 0.002

Ó 2018 The Agricultural Economics Society

LANO*PEST 0.075 0.050 0.259** 0.101 0.020 0.083 0.036*** 0.009
SEED*FERT 0.019** 0.008 0.034** 0.016 0.027* 0.015 0.035*** 0.002
SEED*PEST 0.023 0.035 0.035 0.061 0.033 0.070 0.062*** 0.009
FERT*PEST 0.010 0.020 0.023 0.032 0.005 0.023 0.014*** 0.003
TVRP*LAND 0.008 0.006 0.026*** 0.010 0.002 0.010 0.004*** 0.001
TVRP*LABO 0.008 0.007 0.021 0.014 0.011 0.012 0.005*** 0.001
TVRP*SEED 0.009** 0.004 0.020** 0.008 0.008 0.008 0.010*** 0.001
TVRP*FERT 0.006* 0.003 0.009 0.007 0.013** 0.005 0.013*** 0.001
TVRP*PEST 0.013 0.011 0.062*** 0.018 0.034* 0.018 0.038*** 0.002
TVAP*LAND 0.001 0.007 0.011 0.009 0.019* 0.010 0.012*** 0.001
TVAP*LABO 0.018** 0.007 0.034** 0.013 0.052*** 0.011 0.038*** 0.001
TVAP*SEED 0.019*** 0.005 0.022** 0.009 0.024*** 0.008 0.027*** 0.001
TVAP*FERT 0.007** 0.003 0.020*** 0.005 0.025*** 0.005 0.019*** 0.001
Kotchikpa G. Lawin and Lota D. Tamini

TVAP*PEST 0.007 0.010 0.009 0.016 0.036** 0.016 0.016*** 0.002

ADOPT 0.008 0.033 0.013 0.068 0.034 0.060 0.037*** 0.007
TSOL1 0.029 0.044 0.119 0.095 0.019 0.096 0.032*** 0.010
TSOL2 0.079 0.061 0.103 0.097 0.025 0.102 0.031** 0.012
TSOL3 0.042 0.039 0.054 0.087 0.066 0.091 0.053*** 0.010
TSOL4 0.074 0.051 0.044 0.146 0.093 0.155 0.005 0.019
BTREAT 0.068** 0.031
 Table 3
(Continued)

Conventional model Sample selection models

Ó 2018 The Agricultural Economics Society

Pooled Landowners Non-owners
(P-M) (L-M-S) (N-M-S) Metafrontier

Variables Coeff SE Coeff SE Coeff SE Coeff SE

rðuÞ 0.925*** 0.089 0.147 0.432

rðvÞ 0.627**** 0.040 1.207**** 0.043
RHO(w, v) 0.012 1.524 0.946*** 0.017
Log-likelihood 2309.144 1982.331 1911.47 891.25
Observations 2,076 1,038 1,038 2,076

Notes: *P < 0.10, **P < 0.05, ***P < 0.01; P-M = conventional ODF model using pooled matched sample; L-M-S = sample selection ODF model using
Tenure security and farm efficiency

matched landowners sub-sample; N-M-S = sample selection ODF model using matched non-owners sub-sample. Results using the unmatched samples
are omitted because of space but are available in the online appendix.
13
14 Kotchikpa G. Lawin and Lota D. Tamini

the TE score (Kumbhakar et al., 2009; Greene, 2010; Bravo-Ureta et al., 2012;
Kathuria et al., 2013).

4.2. Technical efficiency

Table 4 shows the TE scores obtained using the estimated stochastic ODF models.
From the pooled estimates (TE-Pool), it appears that there is no statistical differ-
ence in mean TE between landowners and non-owners and the TE ranges from 49%
to 98%. However, the separate sample selection results indicate that non-owners have
higher average efficiency scores than landowners (89% versus 53%) indicating that
non-owners operate closer to their own production frontier than landowners. To
make accurate comparisons across groups, we run a meta-frontier regression using
Huang et al.’s (2014) approach and derive the gaps between the meta-frontier and the
individual group frontiers (the meta-technology gap ratio) and the TE with respect to
the meta-frontier (MTE).
The average value of meta-frontier technical efficiency (MTE) for the whole sector
is 63% implying that the smallholder farmers of Benin are able to increase their pro-
duction by 37% (on average) using their current technology. The MTE score esti-
mates are lower than those obtained from previous studies on smallholder farmers in
Benin. Using an SFP function, Kinkingninhoun-M^edagbe et al. (2008) found an aver-
age TE score of 84%. Singbo and Oude Lansink (2010) used a directional distance
function to find an average TE score of 82% for lowland farming systems. Singbo
et al. (2014) used the DEA method to find an average TE score of 87%.
The estimated mean MTR for non-owners (0.82) is significantly higher than for
landowners (0.45). In addition, the average TE relative to the meta-frontier (MTE) is

Table 4
TE scores with the estimated models

Item Mean SD Minimum Maximum

Landowners
TE-Pool† 0.62 0.14 0.49 0.98
TE- sample selection ODF‡ 0.53 0.14 0.04 0.92
Metafrontier technology gap (MTR) 0.86 0.07 0.82 1.00
TE-Metafrontier (MTE)§ 0.45 0.13 0.04 0.77
Non-owners
TE-pool† 0.64 0.15 0.49 0.98
TE-sample selection ODF‡ 0.89 0.01 0.85 0.94
Metafrontier technology gap (MTR) 0.92 0.06 0.82 1.00
TE-Metafrontier (MTE)§ 0.82 0.05 0.70 0.93
Total (Landowners and non-owners)
TE-pool† 0.63 0.14 0.49 0.98
TE-Sample selection ODF‡ 0.71 0.21 0.04 0.94
Metafrontier technology gap (MTR) 0.89 0.07 0.82 1.00
TE-Metafrontier (MTE)§ 0.63 0.21 0.04 0.93

Notes: †TE estimates using the conventional ODF and the pooled dataset.
‡
TE estimates relative to the individual group’s frontier using the Sample Selection ODF.
§
TE estimates relative to the metafrontier.

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 Tenure security and farm efficiency 15

significantly higher for non-owners (0.92) than for landowners (0.86). These results
suggest that non-owners are more technically efficient than landowners. One explana-
tion for this could be self-selection into the land market. Smallholder farmers who
shift away from family land to rented or sharecropped land are those with higher
managerial ability and who practice less traditional agriculture. Our finding is consis-
tent with previous work by Feng (2008) and Ma et al. (2017) who found a negative
impact of ownership on technical efficiency in China. However, it differs from the
results of studies in Ethiopia and the Philippines that find positive ownership impact
on farm efficiency (Ahmed et al., 2002; Ghebru and Holden, 2015; Koirala et al.,
2016). However, the latter studies did not account for biases stemming from
endogeneity.
Because non-owners appear to be more efficient and productive than landowners, it
implies that, in Benin, the leasing or sharecropping of the land favours reallocation of
land from the least productive farmers to the most productive ones and thereby con-
tributes to efficient use of land resources (factor intensity effect).

4.3. Elasticity measures

The input and output elasticities as well as the scale elasticity at the mean value
for the matched sample are presented in Table 5. In all models, the scale elastic-
ity is less than one, indicating diseconomies of scale in the crop production sec-
tor in Benin, which is consistent with the results of studies on smallholder
farmers in developing countries (Bravo-Ureta et al., 2012; Chavas et al., 2005;
Solis et al., 2009).
The output elasticities of the meta-frontier models show that the share of
grain (the output chosen as the reference in the distance function) in total pro-
duction is higher than all other products (58%). The fertiliser elasticity is partic-
ularly low in all models.

Table 5
Distance elasticities of conventional and selection models: Matched sample

Conventional models Sample selection models

Pooled Landowners Non-owners

(P-M) (L-M-S) (N-M-S) Metafrontier

Variables Mean SD Mean SD Mean SD Mean SD

Outputs
Roots and tubers 0.26 0.56 0.15 0.20 0.14 0.17 0.14 0.17
Other crops 0.54 0.61 0.30 0.22 0.36 0.34 0.34 0.25
Inputs
Land 0.02 0.11 0.21 0.22 0.22 0.15 0.23 0.18
Labour 0.09 0.10 0.24 0.21 0.24 0.21 0.24 0.17
Seeds 0.09 0.09 0.20 0.21 0.17 0.19 0.18 0.22
Fertiliser 0.06 0.20 0.11 0.20 0.13 0.27 0.13 0.29
Pesticide 0.10 0.11 0.25 0.32 0.13 0.14 0.12 0.14
Scale elasticity 0.35 0.15 1.01 0.49 0.89 0.42 0.90 0.46
Observations 2,076 1,038 1,038 2,076

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16 Kotchikpa G. Lawin and Lota D. Tamini

5. Conclusions and Implications

We used an output distance function (ODF) to analyse the impact of tenure security
on technical efficiency of farmers in Benin. In our estimates, we corrected for selection
biases from unobserved variables and from observed characteristics by combining a
selection corrected stochastic production frontier (SPF) model with propensity score
matching (PSM). We used a meta-frontier approach to assess productivity differences
between landowners and non-owners.
Our analyses show that, on average, non-owners are more efficient than landowners.
The average technical efficiency score relative to the meta-frontier (MTE) for the whole
sector is 63% implying that smallholder farmers of Benin are able to increase their pro-
duction by 37% using their current technology by better allocating their inputs. We
found that there are diseconomies of scale in the crop production sector of Benin.
The MTE scores for owners and non-owners, respectively, are 45% and 82%,
implying that, in Benin, the leasing or sharecropping of land favours the reallocation
of land from the least efficient farmers to the most efficient ones and thus contributes
to efficient use of land resources. This suggests that the land certification programme
will have a positive impact on TE and productivity only if it leads to the promotion of
land transactions. However, the provision of extension services to improve small-
holder’s managerial skills needs to be improved so that the productivity potential gain
associated to tenure leads to real productivity increases.

Supporting Information
Additional Supporting Information may be found in the online version of this article:
Table A1: Number of plots and household crop portfolio.
Table A2: Descriptive statistics of the variables included in the model (production
function and inefficiency term).
Table A3: ML estimates for the conventional and sample selection ODF models:
unmatched sample.
Figure A1: Number of crops grown per household.
Figure A2: Number of plots cultivated per household.
Figure A3: Common support with non-owners as control.

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