This study evaluated the impact of small-scale irrigation on farm households’ technical efficiency of production in Girawa district, East Hararghe, Oromia, Ethiopia. Both primary and secondary data were collected for the study. Primary data were collected from 200 sample respondents drawn from both participant and non-participant households. Econometric models were employed for data analysis. Stochastic production frontier model was used for technical efficiency estimation and Propensity score matching method was applied to analyze the impact of small-scale irrigation on the technical efficiency. The logistic regression was employed to estimate propensity scores. In matching processes, kernel matching with band width of 0.5 was found to be the best matching algorism. This method was also checked for covariate balancing with a standardized bias, t-test, and joint significance level tests. The results revealed that households that participate in irrigation practice have got an improvement of 8.92% in technical efficiency than those households that were not participating in irrigation practice. Results showed that participation in irrigation has a significant, positive and robust impact on the outcome variables. The sensitivity analysis also showed that the impact estimates are insensitive to unobserved selection bias. All results obtained from different models revealed the positive impact of irrigation on farm household technical efficiency. Therefore, policy makers should give due emphasis to the aforementioned variables to increase participation in irrigation farming and improve the livelihood of rural households.
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