Quantifying Profit Efficiency in Sweet Potato Marketing in Owerri, Nigeria: A Stochastic Frontier Analysis

Despite significant production volumes, marketing inefficiencies constrain sweet potato profit margins in Nigerian urban markets. The study therefore analyzed the efficiency of sweet potato marketing in the study area. Data were collected with the aid of a well-structured questionnaire from 40 randomly selected sweet potato marketers from 2 purposively selected markets. Data were analyzed using descriptive statistics and stochastic profit function. Results showed that the mean age of the sweet potato marketers was 37 years and majority (57.5%) were female. All the parameter estimates such as cost price of sweet potato, transportation, market space (rent) are negative and are statistically significant at 1% and 5% respectively showing that increase in them decreases total profit associated with sweet potato marketing in the study area. The maximum likelihood estimates for the stochastic profit function used in explaining the inefficiency parameters for the sweet potato marketers indicated that all the parameters such as sex, marital status etc except age had the a priori expected signs (negative) and are all statistically significant showing that an increase in any of them decreases inefficiency. The marketing efficiency scores of the sampled marketers ranged from 0.11 to 0.75.with a mean profit efficiency is 0.45 meaning that an average sweet potato marketer in the study area has a scope for increasing profit efficiency by 55%. It was concluded that sweet potato marketers are not profit efficient from their profit efficiency indices.