The first test result reported in Table 4 is on the null hypothesis that inefficiency effects are
not stochastic. The LR test for the first null is accepted for cost efficiency, and is rejected for
profit efficiency estimate. It means that the Cobb-Douglas functional form is preferred to the
translog form for estimating cost efficiency. The second null hypothesis specifies that the
inefficiency effect is absent. This null hypothesis is strongly rejected at 0.05 probability level
of significance for both cost and profit efficiency. This suggests that there is technical
inefficiency.