Role of Human Capital in Efficiency Increases: Evidence from a Data Envelopment Analysis of Rubber Smallholdings in Gampaha District

This study was carried out to analyze the present level of technical efficiency of rubber smallholders in Gampaha district and primary data were collected from 100 smallholder rubber farmers. Data Envelopment Analysis (DEA) was utilized to estimate technical efficiency levels. A double censoring Tobit model was estimated to assess factors affecting technical efficiency. Farmer specific and tapper specific factors were considered as covariates in the Tobit model. Findings reveal that, levels of human capital of owner farmers as well as latex extractors account for variations in technical efficiency levels. This highlights the importance of directing extension services not only towards the owner farmers, but also towards hired latex extractors to reap benefits of the present price hikes in the rubber sector.