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

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.