New Economics Papers
on Efficiency and Productivity
Issue of 2005‒10‒08
seven papers chosen by

  1. Reaching Millennium Goals: How well does agricultural productivity growth reduce poverty? By Nomaan Majid
  2. Firm and Industry Level Profit Efficiency Analysis Under Incomplete Price Data: A Nonparametric Approach based on Absolute and Uniform Shadow Prices By Timo Kuosmanen; Mika Kortelainen; Timo Sipiläinen; Laurens Cherchye
  3. Infrastructure and Growth in South Africa: Benchmarking, Productivity and Investment Needs, paper presented at Economic Society of South Africa (ESSA) Conference, Durban, 9/7-9/2005 By Zeljko Bogetic; Johannes Fedderke
  4. Is a stable workforce good for the economy? Insights into the tenure-productivity-employment relationship By Peter Auer; Janine Berg; Ibrahim Coulibaly
  5. Factor Adjustments After Deregulation: Panel Evidence from Colombian Plants By Marcela Eslava; John Haltiwanger; Adriana Kugler; Maurice Kugler
  6. How Unobservable Productivity Biases the Value of a Statistical Life By Thomas J. Kniesner; W. Kip Viscusi; Christopher Woock; James P. Ziliak
  7. Infrastructure, Productivity and Urban Dynamics in Cote d'Ivoire, Africa Region Working Paper Series No. 86 (July 2005), The World Bank, Washington D.C. By Zeljko Bogetic; Issa Sanogo

  1. By: Nomaan Majid (International Labour Office, Employment Strategy Department)
    Keywords: agricultural productivity, poverty
    Date: 2004–08–05
  2. By: Timo Kuosmanen (Wageningen University, Environmental Economics & Natural Resources Group); Mika Kortelainen (University of Joensuu, Department of Business & Economics); Timo Sipiläinen (Agrifood Research Finland, MTT Economic Research); Laurens Cherchye (Catholic University of Leuven, Campus Kortrijk & Center for Economic Studies)
    Abstract: We discuss the nonparametric approach to profit efficiency analysis at the firm and industry levels in the absence of complete price information, and propose two new insights. First, choosing one commodity (whose price is known) as a numeraire good enables us to measure profit inefficiency in absolute monetary terms. Second, imposing a ‘Law of One Price’ (LoOP) constraint that all firms should be evaluated in terms of the same input-output prices allows us to aggregate firm-level profit inefficiencies to the overall industry inefficiency. Moreover, the LoOP restrictions increase the discriminatory power of the method by better capturing firm-level allocative inefficiencies. Besides the measurement of profit losses, the presented approach enables one to recover absolute price information from quantity data. We conduct a series of Monte Carlo simulations to study the performance of the proposed approach in controlled production environments.
    Keywords: Profit Efficiency, Industry Inefficiency, Data Envelopment Analysis, Absolute Prices, Law of One Price, Weight Restrictions, Simulation
    JEL: C14 C61 D21 D24 D61
    Date: 2005–09–30
  3. By: Zeljko Bogetic (The World Bank); Johannes Fedderke (University of Cape Town, South Africa)
    Abstract: The paper provides three principal results. First, we benchmark South African infrastructure performance in terms of access, pricing, and quality against key comparator groups of countries using the most recent World Bank benchmarking data base (2005). Second, we establish clear empirical links between infrastructure and productivity using South African time-series data. And third, we estimate long-run demand for electricity and telephony using a panel of 52 low-income and middle- income countries for the period 1980-2002 and then project investment needs in these sectors until 2010. Our projections indicate average annual electricity generating requirement of US$0.5 billion or about 0.2% of GDP, and US$1.98 billion or 0.75% of GDP for telephony.
    Keywords: infrastructure, growth, productivity, investment, South Africa
    JEL: D5 D6 D7 H O P E C1 C8
    Date: 2005–10–05
  4. By: Peter Auer (International Labour Office, Employment Strategy Department); Janine Berg (International Labour Office, Employment Strategy Department); Ibrahim Coulibaly (International Labour Office, Employment Strategy Department)
    Abstract: In a follow-up to former studies on the resilience of the long-term job in Europe, the present study asks whether, on average, long tenure of a country’s workforce is good or bad for productivity growth. While there is concern that high average tenure indicates a “rigid” labour market with low adjustment capacity to structural change and with an assumed detrimental effect on productivity, the findings do not support such a hypothesis, at least not for the countries and the period analysed. The relationship between tenure and productivity for the period 1992 to 2002 shows that at an aggregate level, tenure has a positive effect on productivity for about 14 years and levels off thereafter. Overall, it seems that countries remain productive with a high share of long-tenured workers. While long tenure seems to be good for productivity, it might be less positive for the labour markets within Europe, as the more flexible labour markets are generally associated with higher employment rates. We discuss ways to overcome productivity-employment trade-offs, in particular we propose using social dialogue to institutionalize “flexibility-security.” Doing so does not only benefits individual workers and employers, but macroeconomic performance as well.
    Keywords: employment tenure, productivity, labour market flexibility, employment
    Date: 2004
  5. By: Marcela Eslava; John Haltiwanger; Adriana Kugler; Maurice Kugler
    Abstract: In this paper, we analyze employment and capital adjustments using a panel of plants from Colombia. We allow for nonlinear adjustment of employment to reflect not only adjustment costs of labor but also adjustment costs of capital, and vice-versa. Using data from the Annual Manufacturing Survey, which include plant-level prices, we generate measures of plant-level productivity, demand shocks, and cost shocks, and use them to measure desired factor levels. We then estimate adjustment functions for capital and labor as a function of the gap between desired and actual factor levels. As in other countries, we find non-linear adjustments in employment and capital in response to market fundamentals. In addition, we find that employment and capital adjustments reinforce each other, in that capital shortages reduce hiring and labor shortages reduce investment. Moreover, we find that the market oriented reforms introduced in Colombia after 1990 increased employment adjustments, especially on the job destruction margin, while reducing capital adjustments. Finally, we find that while completely eliminating frictions from factor adjustments would yield a dramatic increase in aggregate productivity through improved allocative efficiency, the reforms introduced in Colombia generated only modest improvements.
    JEL: E22 E24 O11 C14 J63
    Date: 2005–10
  6. By: Thomas J. Kniesner; W. Kip Viscusi; Christopher Woock; James P. Ziliak
    Abstract: A prominent theoretical controversy in the compensating differentials literature concerns unobservable individual productivity. Competing models yield opposite predictions depending on whether the unobservable productivity is safety-related skill or productivity generally. Using five panel waves and several new measures of worker fatality risks, first-difference estimates imply that omitting individual heterogeneity leads to overestimates of the value of statistical life, consistent with the latent safety-related skill interpretation. Risk measures with less measurement error raise the value of statistical life, the net effect being that estimates from the static model range from $5.3 million to $6.7 million, with dynamic model estimates somewhat higher.
    JEL: I10 J17 J28 K00
    Date: 2005–10
  7. By: Zeljko Bogetic (The World Bank); Issa Sanogo (The World Bank)
    Abstract: Recent contributions in economic geography reflect renewed interest in issues of location and spatial concentration of economic activities, yet there are still few empirical studies of developing countries, particularly in Africa. This paper aims to contribute to this body of knowledge by (i) documenting wide regional disparities in economic activity and infrastructure (especially between the north and the south), which were partly determined by regional development policy, and (ii) examining empirically to what extent spatial factors such as agglomeration economies contribute to labor productivity––and therefore to urban dynamics––using recent panel data from Côte d’Ivoire for the period from 1980 to 1996.
    Keywords: infrastructure productivity urban Cote d'Ivoire Ivory Coast Africa
    JEL: R O P D6 D7 H
    Date: 2005–10–05

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