A Production Efficiency Impact on the Poverty Level of a Rural Household
3. Theoretical Background
This chapter consists of two blocks and describes the review of theoretical thought dedicated to poverty and production efficiency problems. The first part is a review of the poverty measurement thought, which helps to formulate the definitive part of the problem the methodology of poverty measurement, international practice and standards, poverty indicators and measurement issues.
Separately analyzed is an approach to practical poverty measurement based on the specific circumstances of Kyrgyzstan. The second part is devoted to production function theory developments relating to measuring productivity and efficiency on a microeconomic scale. Two main frontier efficiency analysis methods are reviewed the Data Envelopment Analysis (DEA) and the Stochastic Frontier Analysis (SFA), with their specific assumptions and specifications.
3.1.1Poverty Measurement Tools
The definitive part of poverty measurement approaches and methods is important as it is directly influenced the results of the empirical analysis of poverty. The description of the main components and parameters of poverty analysis helps us to concentrate our attention on the practical application of the poverty analysis and its linkages.
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