Abstract

Abstract | A state of the economy in which output reflects customer desires is known as allocative efficiency. Every good or service is manufactured until the last unit supplies consumers with a marginal gain equal to the marginal cost of production in an economy. The study in hand was designed to assess the allocative efficiency of tobacco growers during 2019. Primary data was collected through face to face interview and a sample of 120 tobacco growers was selected. These growers were randomly selected from three villages namely Takar Kaly, Garo Shah, and Pasand Kaly of tehsil Takhtbai, district Mardan of Khyber Pakhtunkhwa. Empirical findings reveal that labour, chemical, irrigation, seed, poultry manure, and tractor have positive and statistically significant effects on tobacco production. Results of the study also corroborate an insignificant relationship of fertilizer with tobacco production. Findings of the study also showed that the allocation of inputs utilized during production e.g. labour, irrigation, seed, poultry manure and tractor are under-utilized, chemical is optimally-utilized while fertilizer is over-utilized by the growers in the study area. Therefore, this study suggests a rational use of fertilizer and recommends keeping the quantity of chemical use constant.