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on Efficiency and Productivity |
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Issue of 2005‒11‒05
ten papers chosen by |
| By: | Alan W. Renwick (Land Economy Research Group, Scottish Agricultural College, UK); Cesar L. Revoredo Giha (Department of Land Economy, University of Cambridge); Mark A. Reader (Department of Land Economy, University of Cambridge) |
| Abstract: | The purpose of this paper is to study the effect that the imminent reform in the European Union (EU) sugar regime may have on farm productivity in the United Kingdom (UK). We perform the analysis on a sample of sugar beet farms representative of all the UK sugar beet regions. To estimate the changes in productivity, we estimate a multi-output cost function representing the cropping part of the farm, which is the component that would be mostly affected by the sugar beet reform. We use this cost function to compute the new allocation of outputs and inputs after the changes in the sugar beet quota and price support. This are subsequently used to compute measures of total factor productivity. Our results show slight decreases in the productivity at the individual farm level under both quota and price support reduction. However, when considering the aggregate level, the reduction in the price support shows significant increases in productivity, in contrast to the results obtained from a reduction in quota. |
| Keywords: | EU sugar reform; UK agriculture; UK sugar beet production; Multi-output cost function; Total factor productivity |
| Date: | 2005–02 |
| URL: | http://d.repec.org/n?u=RePEc:lnd:wpaper:200504&r=eff |
| By: | Danilo Camargo Igliori (Department of Land Economy, University of Cambridge, UK) |
| Abstract: | The determinants of technical efficiency in agriculture and cattle ranching are closely related with the debate involving the conservation-development trade-off in the Brazilian Amazon. Concerned with balancing development and environmental conservation, policy makers and academics have emphasized the importance of choosing ways of selecting areas where land use restrictions would be established. In order to understand the relationship between spatial patterns of deforestation and the associated distribution and characteristics of economic activity, issues regarding technical efficiency are clearly important. This paper aims to identify the socio-economic and environmental determinants of technical efficiency in agriculture and cattle ranching in the Brazilian Amazon emphasizing their relationship with spatial processes of deforestation and development. The study is structured in two parts. The first part is concerned with measuring technical efficiency for agriculture and cattle ranching in each geographical unit focusing on the production relationship between inputs and outputs. The second one focuses on the variation in the efficiency measure explained by exogenous factors and includes the spatial analysis. We adopt the model proposed by Battese and Coelli (1995) where the production function and the exogenous effects influencing technical efficiency are estimated simultaneously. |
| Keywords: | stochastic frontier, technical efficiency, spatial analysis, Brazilian Amazon |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:lnd:wpaper:200509&r=eff |
| By: | Alan W. Renwick (Land Economy Research Group, Scottish Agricultural College, UK); Cesar L. Revoredo Giha (Department of Land Economy, University of Cambridge) |
| Abstract: | The purpose of the paper is examining the potential implications for the UK sugar beet sector of the EU sugar regime reform. Although the reform has yet to be formalised, the initial proposals centre on price and quota cuts. Using panel data from the Farm Business Survey for England, the paper estimates two cost functions: one for the sugar enterprise and another for the cropping part of the farm (i.e., excludes any livestock enterprise) and use them to analyse the impacts on profitability and costs of three possible reform scenarios: a 25 per cent cut in UK quota, a 25 per cent cut in price, a 40 per cent cut in price. The results show that the largest gains in terms of economic efficiency would be achieved under the 40 per cent price cut; however, the models suggest that this would also lead to the greatest reduction in production if the fixed costs of producing sugar were not adjusted. |
| Keywords: | EU sugar reform; UK agriculture; UK sugar beet production; Multi-output cost function. |
| Date: | 2005–02 |
| URL: | http://d.repec.org/n?u=RePEc:lnd:wpaper:200507&r=eff |
| By: | Frantisek Brazdik; Viliam Druska |
| Abstract: | Performance in retailing is usually evaluated by routine use of ratio analysis, but due to the univariate nature of this simple management tool there are many drawbacks to the obtained results. Therefore, the aim of this study is to demonstrate successful employment of parametric and non–parametric methods for evaluating technical performance in retailing. We also show how to utilize DEA results, when parametric methods do not satisfactorily perform due to their strict distributional assumptions. Results of this study are used to optimize the retail chain of a European mobile telecommunication network operator by providing estimates of and recommendations for improvements in the productive efficiency of the chain operations. Estimates of store–level technical and scale efficiency indicate that a majority of stores are operating in the decreasing returns to scale region of the production possibility set. The employed methodology allows us to identify input excesses and to address a means of reducing them. |
| Keywords: | Data envelopment analysis application, linear programming, ef-ficiency, retail units |
| JEL: | C14 C44 D24 L81 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp273&r=eff |
| By: | Yoonsoo Lee |
| Abstract: | Procyclical productivity plays an important role in many models of aggregate fluctuations. However, recent studies using aggregate data to directly measure technology shocks in the Solow residual find that technology shocks are not procyclical. This paper provides new evidence that, due to countercyclical composition changes between producers, the procyclicality of productivity observed in aggregate data may be understated. Using plant-level microdata, this paper finds that the reallocation of output shares across continuing plants, as well as the entry and exit of plants, creates a countercyclical component in aggregate productivity. This paper shows that such composition changes may cause a downward bias in industry-level estimates of returns to scale. The findings of this paper suggest that, without correcting for the countercyclical effects of reallocations, estimates based on aggregate data may not reflect the true cyclicality of technology shocks, which a representative agent faces over the business cycle. |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwp:0509&r=eff |
| By: | Somesh Kumar Mathur (Jamia Millia Islamia); Shahid Ahmed (Jamia Millia Islamia) |
| Abstract: | We work out technical efficiency levels of the Indian States and Union Territories using Data Envelopment Analysis from 1980-81 to 1997-98. We decompose net value added per worker growth into components attributable to technological changes (shifts in the overall production frontier),technological catch up(movement towards or away from the frontier) and capital accumulation(movement along the frontier).The overall production frontier is constructed using data envelopment analysis, requiring no specification of functional form for the technology nor any assumption about market structure or the absence of market imperfections. We analyze the evolution of cross states net value added distribution for the 22 Indian states and union territories from 1980-81 to 1997-98 using Kernel densities. The efficiency factor accounted for 5.07 % only,technological change accounted for 11.66 % while the contribution of capital deepening is relatively higher at 17.82% while the point to point productivity change is of 11.66%. The overall averages provide evidence of productivity improvements of 173.29 over 1980-81(base) to 1997-98(current year) period.The efficiency factor accounted for -10.63% % only,technological change accounted for 173.20 while the contribution of capital deepening is 42.52% TO ACCOUNT for 173.20% overall PRODUCTIVITY CHANGE(not point to point). The results seems to suggest that there are other factors suggested in the literature like barriers to exit, a maze of rules and regulations, government import policies, high concentration, among others, rather than the ones that are included below for the growth accounting exercise which can totally account for point to point and overall productivity changes from 1980-81 to 1997-98..Also, we do find that the efficiency levels for the Indian states have gone down from what it was in 1980s to what it were in 1997-98.However,the smaller states have out performed the larger states in terms of their efficiency levels. Also, States which had relatively lower efficiency levels and net value added per worker in 1980-81 are the ones which have grown faster than other states. We see tendency of catching up among the Indian states in terms of net value added per worker.. |
| Keywords: | growth accounting, data envelopment analysis, technical efficiency, efficiency change, technological change, capital deepening,, kernel smoothing, cross country labor productivity distribution |
| JEL: | C6 D5 D9 |
| Date: | 2005–10–28 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpge:0510010&r=eff |
| By: | Oldrich Kyn (Boston University); Ludmila Kyn (---) |
| Abstract: | During the 1960s most of the countries of Eastern Europe experienced a visible retardation of economic growth. This paper supports the view of many Eastern as well as Western economists that the retardation was caused primarily by declining rates of growth of the total factor productivity. The rate of growth of the total factor productivity was estimated as a parameter of the macroeconomic production functions. Several other economists who estimated the production functions for East European countries obtained frequently results with low statistical significance because the time series were short and in addition suffered with the high degree of multicollinearity. In a previous papers (Kyn-Kyn ) we tried to demonstrate, that this obstacles can be overcome by estimating the production functions from the pooled cross-section and time series data. By doing so we received economically reasonable and statistically significant estimates of the capital and labor elasticities, and of the rate of technical change for Poland, Czechoslovakia, Hungary, Bulgaria and Rumania. Although the pooling eliminated the multicollinearity, it caused two other problems, namely heteroscedasticity and autocorrelation. In this paper we have applied a step-wise method with data transformation that practically eliminated these problems. Our results confirmed that the average annual rates of growth of the total factor productivity were very high (around 6 per cent) in the case of Czechoslovakia, Bulgaria and Rumania and somewhat lower, but still respectable (3 - 5 per cent) in the case of Poland and Hungary. It is, however, necessary to keep in mind that this estimates are not strictly comparable with the similar estimate for Western countries, because we have used the gross value of industrial production rather than GNP for measuring the output, and only the data for the nationalized part of industry. In the version of the model that allowed for changing rate of growth of total factor productivity over time we found that Czechoslovakia, Poland and Bulgaria experienced a quite considerably declining trend in the rate of change of the total factor productivity while such trend could not have been discovered in Hungary and Rumania. |
| Keywords: | Production Function, Total Factor Productivity, Eastern Europe, Czechoslovakia. Hungary, Poland, Bulgaria, Romania, |
| JEL: | E |
| Date: | 2005–10–29 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpma:0510025&r=eff |
| By: | Paul R. Gregory; Valery Lazarev |
| Abstract: | This paper examines structural change in the Russian economy in 1990-2001, as measured by the changing composition of output and consumption, using international panel data sets as a frame of reference. It calculates a series of indexes to determine the extent to which the Russian economy is converging towards market economies. Although the Russian structure of output is becoming increasingly similar to that of upper-middle and the lower tier of high-income countries, the structure of Russian manufacturing is inconsistent with its income level and the extent of labor reallocation remains inadequate. Russia's pattern of consumption remains distorted due to the incomplete price liberalization. |
| Keywords: | Post-Communist Transition, Value Added, Labor Productivity, Composition of GDP, Price Distortions |
| JEL: | E20 P20 |
| Date: | 2004–10 |
| URL: | http://d.repec.org/n?u=RePEc:egc:wpaper:896&r=eff |
| By: | Matilde Mas; Javier Quesada |
| Abstract: | Using new sectoral data on investment and capital services we carry out a growth accounting exercise on Spain 1985-2002. We compute the contribution to output and labour productivity growth of employment, non-ICT and ICT capital, labour qualification and Total Factor Productivity. Results are given for 29 different branches; individually and grouped into four clusters according to their ICT use intensity. Three ICT assets (hardware, communications and software) are considered. We find that although the ICT intensive group appears to be the most dynamic cluster, most of the impact on productivity is still to come. There is some evidence of a reversal of the productivity slow down of the nineties starting in the year 2000. En utilisant de nouvelles données sectorielles sur les investissements et services de capital, nous menons à bien un exercice de comptabilité de croissance de l’Espagne entre 1985 et 2002. On calcule la contribution à la croissance et la productivité du travail, de l’emploi du capital TIC et non TIC, de la qualification de main d’oeuvre et de la productivité globale des facteurs. Les résultats sont donnés pour 29 différentes branches, individuellement et réparties en quatre groupes, selon l’intensité d’utilisation de leur TIC. Trois actifs des TIC sont considérés (le matériel, les communications et les logiciels). Nous trouvons que bien que le groupe le plus intensif en TIC apparaisse comme le plus dynamique, un impact encore plus important sur la productivité est attendu. En 2000, on constate une certaine accélération de la croissance de la productivité après le ralentissement des années 90. |
| Date: | 2005–08–17 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stdaaa:2005/4-en&r=eff |
| By: | Somesh Kumar Mathur (Jamia Millia Islamia) |
| Abstract: | We work out technical efficiency levels of 29 countries consisting of some selected South Asian, East Asian and EU countries using data envelopment analysis. Luxembourg has an efficiency score of one(most efficient) in all the years .Netherlands also has an efficiency score of one in 1966,1971,1976 and 1981.Japan,UK,Belgium,Ireland,Indonesia,Spain and Germany has an efficiency score of one in at least one of the years from 1966 to 2000.In the year 2000 though mean efficiency levels(without including life expectancy as input) of South Asian countries is higher than the European Union Countries and East Asian countries. Japan has the highest average efficiency followed by Hong Kong in the East Asian region in the period 1966-2000. We also decompose labor productivity growth into components attributable to technological changes (shifts in the overall production frontier), technological catch up or efficiency changes(movement towards or away from the frontier),capital accumulation(movement along the frontier) and human capital accumulation( proxied by life expectancy).The overall production frontier is constructed using deterministic methods requiring no specification of functional form for the technology nor any assumption about market structure or the absence of market imperfections. Growth accounting results tend to convey that for the East Asian and the South Asian countries efficiency changes(technological catch up) have contributed the most, while for the European countries it is the technical changes which has contributed more to labour productivity changes between 1966-2000. We also analyze the evolution of cross country distribution for the 29 countries included in our sample using Kernel densities. It seems that there are other factors like trade openness,quality of governments,population rate of growth, savings rate, corruption perception indices, rule of law index, social capital and trust variables, formal and informal rules governing the society, among others, rather than the ones that are included below for the growth accounting exercise which may be responsible for productivity accounting on point to point basis. For all the seven periods(point to point basis) we see a major role played by technological changes and efficiency changes together to account for the current period counterfactual distributions and for the bimodal distribution in year 2000, and for the period 1966-2000(not point to point basis –an excercise done similar to Kumar and Russell(2002)) we find technical changes and its combination with other tripartite and quadripartite changes jointly account for the bimodal distribution in year 2000.However, from this growth accounting exercise, we do find that there is convergence in statistical terms of efficiency changes and human capital accumulation across countries of the EU, South Asian and East Asian regions. |
| Keywords: | : Data envelopment analysis, growth accounting, technical efficiency, efficiency change, technological change, capital accumulation, human capital accumulation, kernel smoothing, cross country labor productivity distribution and counterfactual distributions |
| JEL: | C6 D5 D9 |
| Date: | 2005–10–28 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpge:0510009&r=eff |