Study on the technical efficiency and its influential factors in rose water industray in city of Kashan, Iran

Rosewater industry, a supplementary industry in Kashan, is one of the important sources of income and occupation for this province’s inhabitants. Due to the limitation of production resources and rich background in rosewater industry in Iran, technical efficiency of its production was studied using economic optimality principles with usage of production inputs from rosewater producers in city of Kashan in 2009. Information and data were collected through questionnaire from 100 rosewater producers in 5 sections. Sampling method was classification with proportional allocation. After estimation of Translog functional form and its selection as optimum form of relationships between production and inputs consumption, technical efficiency by stochastic frontier analysis was obtained. Results of the estimated production function showed that 22% of producers used flower input more than optimum level while 28% of producers used water input in first production area, i.e., with increasing of this input they could increase their production. The average of technical efficiency in sample was 97% which has fluctuated between minimum of 67% and maximum of 99%. Also, age, experience, getting new knowledge and creation of side revenue were effective factors on efficiency and with increasing of experience, getting new knowledge and creation of side revenue they can increase their efficiency.