New Economics Papers
on Efficiency and Productivity
Issue of 2009‒01‒10
thirteen papers chosen by

  1. The Productivity Differential Between the Canadian and U.S. Manufacturing Sectors: A Perspective Drawn from the Early 20th Century By Baldwin, John R.; Green, Alan G.
  2. Measuring Productivity By Massimo Del Gatto; Adriana Di Liberto; Carmelo Petraglia
  3. Outreach and Efficiency of Microfinance Institutions By Hermes, Niels; Lensink, Robert; Meesters, Aljar
  4. Migration and technical efficiency in cereal production: Evidence from Burkina Faso By Wouterse, Fleur S.
  5. The impact of climate change and adaptation on food production in low-income countries: Evidence from the Nile Basin, Ethiopia By Yesuf, Mahmud; di Falco, Salvatore; Deressa, Temesgen; Ringler, Claudia; Kohlin, Gunnar
  6. Multi-Factor Policy Evaluation and Selection in the One-Sample Situation By Chen, C.M.
  7. A Long-Term Analysis of Changes in Farm Size and Financial Performance By Snider, Lindsey; Langemeier, Michael
  8. Can we be satisfied with our football team? Evidence from spanish professional football. By Francisco González Gómez; Andrés J. Picazo Tadeo
  9. A General-Equilibrium Asset-Pricing Approach to the Measurement of Nominal and Real Bank Output By J. Christina Wang; Susanto Basu; John G. Fernald
  10. Could you hand me the efficiency section, please? Newspaper circulation and local government efficiency in Norway By Bruns, Christian; Himmler, Oliver
  11. Economic Effects of Bovine Respiratory Disease on Feedlot Cattle during Backgrounding and Finishing Phases By Brooks, Kathleen R.; Raper, Kellie Curry; Ward, Clement E.; Holland, Ben P.; Krehbiel, Clint
  12. The Value of Risk: Measuring the Service Output of U.S. Commercial Banks By Susanto Basu; Robert Inklaar; J. Christina Wang
  13. Accelerating innovation with prize rewards: History and typology of technology prizes and a new contest design for innovation in African agriculture By Masters, William A.; Delbecq, Benoit

  1. By: Baldwin, John R.; Green, Alan G.
    Abstract: Many historical comparisons of international productivity use measures of labour productivity (output per worker). Differences in labour productivity can be caused by differences in technical efficiency or differences in capital intensity. Moving to measures of total factor productivity allows international comparisons to ascertain whether differences in labour productivity arise from differences in efficiency or differences in factors utilized in the production process. This paper examines differences in output per worker in the manufacturing sectors of Canada and the United States in 1929 and the extent to which it arises from efficiency differences. It makes corrections for differences in capital and materials intensity per worker in order to derive a measure of total factor efficiency of Canada relative to the United States, using detailed industry data. It finds that while output per worker in Canada was only about 75% of the United States productivity level, the total factor productivity measure of Canada was about the same as the United States level - that is, there was very little difference in technical efficiency in the two countries. Canada's lower output per worker was the result of the use of less capital and materials per worker than the United States.
    Keywords: Manufacturing, Economic accounts, Productivity accounts
    Date: 2008–12–23
  2. By: Massimo Del Gatto; Adriana Di Liberto; Carmelo Petraglia
    Abstract: Quantifying productivity is a conditio sine qua non for empirical analysis in a number of research elds. The identication of the measure that best ts with the specic goals of the analysis, as well as being data-driven, is currently complicated by the fact that an array of methodologies is available. This paper provides economic researchers with an up-to-date overview of issues and relevant solutions associated with this choice. Methods of productivity measurement are surveyed and classied according to three main criteria: i) macro/micro; ii) frontier/non-frontier; iii) deterministic/econometric.
    Keywords: productivity measurement, TFP, Solow residual, endogeneity, simultaneity, selection bias, Stochastic Frontier Analysis, DEA, Growth accounting,, GMM, Olley-Pakes, rm heterogeneity, price dispersion.
    JEL: O40 O33 O47 C14 C33 C43
    Date: 2008
  3. By: Hermes, Niels; Lensink, Robert; Meesters, Aljar (Groningen University)
    Abstract: This paper uses stochastic frontier analysis (SFA) to examine whether there is a trade-off between outreach to the poor and efficiency of microfinance institutions (MFIs). Using a sample of more than 1,300 observations, our study suggests that outreach and efficiency of MFIs are indeed negatively correlated.
    Date: 2008
  4. By: Wouterse, Fleur S.
    Abstract: "This paper uses data envelopment analysis and new data from Burkina Faso to test the impact of intercontinental and continental migration on technical efficiency in the production of two cereals—millet and sorghum—by rural households. Econometric evidence supports our theoretical expectation that the impact of emigration varies by migrant destination. I find evidence of a positive relation between continental migration and technical efficiency and a negative relation between intercontinental migration and technical efficiency. In an imperfect market environment, continental migration is associated with greater efficiency because it removes a male labor surplus; explanations for the negative relationship between intercontinental migration and technical efficiency should be sought in a surplus of female labor supply. Overall, findings suggest that migration does not lead to a transformation of cereal production from traditional to modern, because in an imperfect market environment, liquidity received in the form of remittances cannot compensate for labor shortfalls." from authors' abstract
    Keywords: Migration, Rural households, Data envelopment analysis, Science and technology, Agricultural innovation, Cereal production, Institutional change, Innovation systems,
    Date: 2008
  5. By: Yesuf, Mahmud; di Falco, Salvatore; Deressa, Temesgen; Ringler, Claudia; Kohlin, Gunnar
    Abstract: "This paper presents an empirical analysis of the impact of climate change on food production in a typical low-income developing country. Furthermore, it provides an estimation of the determinants of adaptation to climate change and the implications of these strategies on farm productivity. The analysis relies on primary data from 1,000 farms producing cereal crops in the Nile Basin of Ethiopia. Based on monthly collected meteorological station data, the thin plate spline method of spatial interpolation was used to interpolate the specific rainfall and temperature values of each household. The rainfall data were disaggregated at the seasonal level. We found that climate change and climate change adaptations have significant impact on farm productivity. Extension services (both formal and farmer to farmer), as well as access to credit and information on future climate changes, affect adaptation positively and significantly. Farm households with larger access to social capital are more likely to adopt yield-related adaptation strategies." from authors' abstract
    Keywords: Adaptation, Climate change, farm level productivity, rainfall,
    Date: 2008
  6. By: Chen, C.M. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: Firms nowadays need to make decisions with fast information obsolesce. In this paper I deal with one class of decision problems in this situation, called the “one-sample†problems: we have finite options and one sample of the multiple criteria with which we use to evaluate those options. I develop evaluation procedures based on bootstrapping DEA (Data Envelopment Envelopment) and the related decision-making methods. This paper improves the bootstrap procedure proposed by Simar and Wilson (1998) and shows how to exploit information from bootstrap outputs for decision-making.
    Keywords: multiple criteria;bootstrap;data envelopment analysis;parametric transformation;R&D project;supplier selection
    Date: 2008–12–11
  7. By: Snider, Lindsey; Langemeier, Michael
    Abstract: This paper examined the changing structure of farms in Kansas. Specifically, changes in farm size, farm type, financial performance, and economies of size were examined using five-year moving averages from 1973 to 2007. Convergence analysis was used to determine whether small farms are catching up to larger farms or whether the difference in performance between these two groups of farms was widening. Results suggested that the gaps between the small farms and large farms have widened.
    Keywords: Economies of Size, Financial Performance, Farm Management, Production Economics, D21,
    Date: 2009
  8. By: Francisco González Gómez (Departmento de Economía Aplicada, Universidad de Granada.); Andrés J. Picazo Tadeo (Departmento de Economía Aplicada II, Universidad de Valencia.)
    Abstract: This paper assesses the sporting performance of Spanish professional football teams at competition level, namely, League, King’s Cup and European competitions (Champions League and UEFA Cup). Then, the gap between the result obtained by a team in a given competition and that expected according to its potential is used as a proxy of the degree of satisfaction that fans should feel: the narrower the gap the greater the level of satisfaction. Regarding methodology, Data Envelopment Analysis techniques and directional distance functions are used. Results reveal that most teams perform rather differently across competitions, the lower average performance corresponding to the King’s Cup
    Keywords: Spanish football League; specific-competition performance; Data Envelopment Analysis.
    JEL: L83 C61
    Date: 2008–12–20
  9. By: J. Christina Wang; Susanto Basu; John G. Fernald
    Abstract: This paper addresses the proper measurement of financial service output that is not priced explicitly. It shows how to impute nominal service output from financial intermediaries' interest income, and how to construct price indices for those financial services. We model financial intermediaries as providers of financial services which resolve asymmetric information between borrowers and lenders. We embed these intermediaries in a dynamic, stochastic, general-equilibrium model where assets are priced competitively according to their systematic risk, as in the standard consumption-based capital-asset-pricing model. In this environment, we show that it is critical to take risk into account in order to measure financial output accurately. We also show that even using a risk-adjusted reference rate does not solve all the problems associated with measuring nominal financial service output. Our model allows us to address important outstanding questions in output and productivity measurement for financial firms, such as: (1) What are the correct "reference rates" to use in calculating bank output? In particular, should they take account of risk? (2) If reference rates need to be risk-adjusted, should they be ex ante or ex post rates of return? (3) What is the right price deflator for the output of financial firms? Is it just the general price index? (4) When--if ever--should we count capital gains of financial firms as part of financial service output?
    JEL: E01 E44 G21 G32
    Date: 2008–12
  10. By: Bruns, Christian; Himmler, Oliver
    Abstract: Whenever citizens want their elected officials to employ funds efficiently, they are in need of information in order to establish accountability. We develop an agency model with imperfect monitoring where newspapers provide voters with this information. The model predicts that an informed electorate is more likely to hold an incumbent accountable. Using panel data on Norwegian municipalities we show that increases in local newspaper circulation are associated with higher levels of local government efficiency as measured by an index introduced by the Norwegian authorities.
    Keywords: media; newspapers; local government; public sector efficiency; Norway
    JEL: H7 D72
    Date: 2008
  11. By: Brooks, Kathleen R.; Raper, Kellie Curry; Ward, Clement E.; Holland, Ben P.; Krehbiel, Clint
    Abstract: This research examines the economic effects of bovine respiratory disease (BRD) on backgrounding and finishing phases of cattle production. This research measures the effectiveness of using serum haptoglobin (Hp) concentration to predict BRD occurrence and the impact of multiple treatments for BRD infection on cattle performance and returns. During the backgrounding phase, 222 heifers were grouped by Hp level. After the backgrounding phase, 193 heifers were then grouped by number of BRD treatments in the finishing phase. Net returns decreased in the backgrounding phase and the combined phases as the number of BRD treatments increased. Hp concentrations had no significant effects on net returns.
    Keywords: bovine respiratory disease, haptoglobin, net returns, Livestock Production/Industries, Production Economics,
    Date: 2009
  12. By: Susanto Basu; Robert Inklaar; J. Christina Wang
    Abstract: Rather than charging direct fees, banks often charge implicitly for their services via interest spreads. As a result, much of bank output has to be estimated indirectly. In contrast to current statistical practice, dynamic optimizing models of banks argue that compensation for bearing systematic risk is not part of bank output. We apply these models and find that between 1997 and 2007, in the U.S. National Accounts, on average, bank output is overestimated by 21 percent and GDP is overestimated by 0.3 percent. Moreover, compared with current methods, our new estimates imply more plausible estimates of the share of capital in income and the return on fixed capital.
    JEL: E01 E44 G21 G32
    Date: 2008–12
  13. By: Masters, William A.; Delbecq, Benoit
    Abstract: "This paper describes how governments and philanthropic donors could drive innovation through a new kind of technology contest. We begin by reviewing the history of technology prizes, which operate alongside private intellectual property rights and public R&D to accelerate and guide productivity growth towards otherwise-neglected social goals. Proportional “prize rewards” would modify the traditional winner-take-all approach, by dividing available funds among multiple winners in proportion to measured achievement. This approach would provide a royalty-like payment for incremental success. The paper provides concludes with a specific example for how such prizes could be implemented to reward and help scale up successful innovations in African agriculture, through payments to innovators in proportion to the value created by their technologies after adoption. " from authors' abstract
    Keywords: Productivity growth, Technology adoption, intellectual property, Agricultural R&D, Innovation,
    Date: 2008

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