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This study presents the empirical analysis of the effects of oil exploitation on the efficiency of artisanal fishing households in the Niger Delta region, Nigeria. The selection of respondents was multi-staged and involved purposive sampling as well as random sampling methods. A structured questionnaire and interview schedule were used to elicit information from a randomly selected sample of 160 artisanal households from Delta and Bayelsa States, Nigeria. Descriptive statistics, stochastic frontier production and cost function models, inefficiency effects model and multiple regression analysis were used in analyzing the data. Among the major findings were that 84% of the respondents were male-headed households. Fifty percent were between 41-50 years. Sixty three percent were illiterates while 87% were married. The average household size was 7 persons. About 49% of the respondents had fishing experience of above 16 years with a mean experience of approximately 15 years. The average annual income per household was N96, 386.00. About 85%, 6%, 6% and 4% used different fishing gears such as nets, trap, longline and hooks, and fence fishing, respectively. The mean technical efficiency was 73%. The Cobb-Douglas stochastic frontier model showed that labour, quantity of bait used and capital inputs had positive signs and were highly significant at 1% level of probability. Age, access to credit and gender had significant inverse relationship with technical inefficiency while fishing distance, membership of co-operative society, fishing experience, number of trips and oil spill had significant positive relationship with technical inefficiency. Model showed that wage rate, price of baits and output adjusted for statistical noise had direct relationship with the total cost of production and were significant at 1% level of probability. The mean economic efficiency was 68%. The factors influencing economic efficiency showed that Age and household size had a negative relationship with economic inefficiency while access to credit, membership of co-operative society, number of trips and oil spill had significant positive relationship with economic inefficiency. Ninety seven percent of the households confirmed that oil exploitation activities had serious effect on their socio-economic life. Variables such as fishing equipment, non-fishing income and household size were significant at 1%, fishing experience was significant at 5% while micro-credit and compensation received were significant at 10% probability levels. The overall regression result was statistically significant at 5% level of probability as 86% of the total variation was explained by the socio-economic variables. Therefore, the study calls for policies that could reduce the level of oil pollution and increase their technical and economic efficiency.
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