New Economics Papers
on Efficiency and Productivity
Issue of 2014‒06‒07
ten papers chosen by

  1. Just Add Milk: A Productivity Analysis of the Revolutionary Changes in Nineteenth Century Danish Dairying By Markus Lampe; Paul Sharp
  2. Total factor productivity estimation in Peru: Primal and dual approaches By Nikita Céspedes; Nelson Ramírez-Rondán
  3. The Impact of Regional and Sectoral Productivity Changes on the U.S. Economy By Lorenzo Caliendo; Fernando Parro; Esteban Rossi-Hansberg; Pierre-Daniel Sarte
  4. A Directional Distance Function Approach to Identifying the Input/Output Status of Medical Residents By Gary D. Ferrier; Viviane Valdmanis; Michael Vardanyan
  5. Are Public and Private R&D Investments Complements or Substitutes? By Anna Bohnstedt
  6. SafeTREC - UCTC Seminar: An Innovative Performance Based Approach to the Health Impacts of Transit Investments By Co, Sean
  7. Hospital Mergers with Regulated Prices By Kurt R. Brekke; Luigi Siciliani; Odd Rune Straume
  8. Trust and Innovation in Europe: Causal, spatial and non-linear forces By Semih Akçomak; Hanna Müller-Zick
  9. Measuring Ratchet Effects within a Firm: Evidence from a Field Experiment Varying Contractual Commitment By Bellemare, Charles; Shearer, Bruce S.
  10. Quantifying the Lasting Harm to the U.S. Economy from the Financial Crisis By Robert E. Hall

  1. By: Markus Lampe (Universidad Carlos III); Paul Sharp (University of Southern Denmark)
    Abstract: The late nineteenth century Danish agricultural revolution saw the modernization and growth of the dairy industry. Denmark rapidly caught up with the leading economies, and Danish dairying led the world in terms of productivity. Uniquely in a world perspective, high quality micro-level data exist documenting this episode. These allow the use of the tool of modern agricultural economists, stochastic frontier analysis, to estimate production functions for milk and thus find the determinants of these productivity and efficiency advances. We identify the contribution of modernization through specific new technologies and practices.
    Keywords: Dairies, Denmark, development, Stochastic Frontier Analysis
    JEL: L2 N5 O3 Q1
    Date: 2014–05
  2. By: Nikita Céspedes (Banco Central de Reserva del Perú y Departamento de Economía de la PUC del Perú); Nelson Ramírez-Rondán (Banco Central de Reserva del Perú)
    Abstract: In this paper we estimate total factor productivity (TFP) growth for the Peruvian economy using the primal and dual methods for the period 2003-2012. According to the primal method, a procedure that uses the Solow residual as an indicator of productivity, TFP grew at an average annual rate of 1.6%, adjusted for the quality and usage of the factors of production. According to the dual method, a procedure that considers estimations of the marginal productivities of the factors of production, TFP grew at an annual rate of 1.7%. JEL Classification-JEL: C23, E23, O47
    Keywords: Productivity, Primal, Dual, Peru, Solow residual
    Date: 2014
  3. By: Lorenzo Caliendo; Fernando Parro; Esteban Rossi-Hansberg; Pierre-Daniel Sarte
    Abstract: We study the impact of regional and sectoral productivity changes on the U.S. economy. To that end, we consider an environment that captures the effects of interregional and intersectoral trade in propagating disaggregated productivity changes at the level of a sector in a given U.S. state to the rest of the economy. The quantitative model we develop features pairwise interregional trade across all 50 U.S. states, 26 traded and non-traded industries, labor as a mobile factor, and structures and land as an immobile factor. We allow for sectoral linkages in the form of an intermediate input structure that matches the U.S. input-output matrix. Using data on trade flows by industry between states, as well as other regional and industry data, we obtain the aggregate, regional and sectoral elasticities of measured TFP, GDP, and employment to regional and sectoral productivity changes. We find that such elasticities can vary significantly depending on the sectors and regions affected and are importantly determined by the spatial structure of the US economy.
    JEL: E0 F1 F16 R12 R13
    Date: 2014–05
  4. By: Gary D. Ferrier (University of Arkansas; CNRS-LEM and IESEG School of Management); Viviane Valdmanis (University of the Sciences in Philadelphia and IESEG School of Management); Michael Vardanyan (IESEG School of Management (LEM-CNRS))
    Abstract: The application of the human capital theory, the production theory, and the comparison of costs between teaching and non-teaching hospitals all point to the difficulties in identifying whether medical residents should be considered as inputs or outputs. We add to the debate by using a data-driven parametric approach based on the directional technology distance function to determine the status of medical residents. Using the American Hospital Association data from 1994 to 2010 we show that residents are inputs in all rural and in public non-teaching hospitals, but outputs in urban-area teaching not-for-profit hospitals. We also demonstrate that the status of residents is related to the case-mix index and that it can sometimes vary with hospital size.
    Keywords: hospitals, directional distance functions
    JEL: C13 D24 I12
    Date: 2014–02
  5. By: Anna Bohnstedt
    Abstract: We develop a general equilibrium model with heterogeneous firms à la Melitz (2003), where both the government and firms can invest into R&D to improve the country’s technological potential. A higher technological potential raises the average productivity of firms, thus implying lower consumer prices, and eventually leads to a welfare gain.
    Keywords: Heterogeneous firms; public and private R&D investments; basic research; innovation
    JEL: O3 H4
    Date: 2014–05
  6. By: Co, Sean
    Abstract: The epidemic of obesity and increased health care costs is a growing issue that is no longer confined to the public health field. Transportation agencies have begun to examine the impact of projects on public health. The Metropolitan Transportation Commission conducted a first of its kind benefit cost analysis of projects to be considered in the long range Regional Transportation Plan (RTP). This performance assessment of transportation investments was conducted to assess the impacts of projects on levels of transit and walking and biking. Bay Area residents that received increases in active transportation from specific transportation investments and resulted in meeting or exceeding the U.S. Surgeon General's recommendation of approximately 30 minutes daily had a health care savings compared to inactive residents. The benefits of active transportation range from $55 million for investments in bicycle infrastructure projects to $500,000 for transit projects where the increase in bike to transit contribute to reduced health care costs and lost productivity.
    Keywords: Engineering
    Date: 2014–04–01
  7. By: Kurt R. Brekke (Department of Economics, Norwegian School of Economics); Luigi Siciliani (Department of Economics and Related Studies; and Centre for Health Economics, University of York); Odd Rune Straume (Universidade do Minho - NIPE)
    Abstract: We study the effects of a hospital merger using a spatial competition framework with semialtruistic hospitals that invest in quality and expend cost-containment effort facing regulated prices. We find that the merging hospitals always reduce quality, whereas non-merging hospitals respond by increasing (reducing) quality if qualities are strategic substitutes (complements). A merger leads to higher average treatment cost efficiency and, if qualities are strategic substitutes, might also increase average quality in the market. If a merger leads to hospital closure, the resulting effect on quality is positive (negative) for all hospitals in the market if qualities are strategic substitutes (complements). Whether qualities are strategic substitutes or complements depends on the degree of altruism, the effectiveness of cost-containment effort, and the degree of cost substitutability between quality and treatment volume.
    Keywords: Hospital mergers; Quality competition; Cost efficiency; Antitrust
    JEL: I11 I18 L13 L44
    Date: 2014
  8. By: Semih Akçomak (TEKPOL, Science and Technology Policy Studies, Middle East Technical University); Hanna Müller-Zick (Maastricht University)
    Abstract: This paper investigates the effect of trust on innovation. In addition to generalised trust we use a range of other indicators that could measure trust and investigate which trust related variables could explain innovation in 20 European countries divided into 135 regions. We specifically look at causal, non-linear and spatial forces. Our findings indicate that only generalised trust and non-egoistic fairness have robust effects on innovation in Europe. Using historical data on the extent and existence of universities and an instrumental variable strategy we set up a causal relationship between trust and innovation. Even after controlling for causal, spatial and non-linear forces there is a significant direct impact of trust on innovation.
    Keywords: trust, social capital, innovation, EU
    Date: 2013–12
  9. By: Bellemare, Charles (Université Laval); Shearer, Bruce S. (Université Laval)
    Abstract: We present results from a field experiment designed to measure the importance of managerial commitment to a contract within a firm that pays its workers piece rates. In the tree planting industry the piece rate paid to workers is determined as a function of the difficulty of the terrain to be planted. During the experiment, workers began planting a terrain at a trial piece rate, but were told this rate would be revised upwards if, after a few work days, average productivity was below that observed on a similar (control) terrain on which the firm had committed to the contract. Our results suggest that worker productivity was 20% to 40% lower in the absence of commitment. The reduction was less pronounced when workers had less time to benefit from any subsequent increase in the piece rate. This provides support for models of worker turnover as a means of overcoming ratchet effects.
    Keywords: ratchet effect, piece rates, incentive contracts, field experiments
    JEL: J33 M52 C93
    Date: 2014–05
  10. By: Robert E. Hall
    Abstract: The financial crisis and ensuing Great Recession left the U.S. economy in an injured state. In 2013, output was 13 percent below its trend path from 1990 through 2007. Part of this shortfall—2.2 percentage points out of the 13—was the result of lingering slackness in the labor market in the form of abnormal unemployment and substandard weekly hours of work. The single biggest contributor was a shortfall in business capital, which accounted for 3.9 percentage points. The second largest was a shortfall of 3.5 percentage points in total factor productivity. The fourth was a shortfall of 2.4 percentage points in labor-force participation. I discuss these four sources of the injury in detail, focusing on identifying state variables that may or may not return to earlier growth paths. The conclusion is optimistic about the capital stock and slackness in the labor market and pessimistic about reversing the declines in total factor productivity and the part of the participation shortfall not associated with the weak labor market.
    JEL: E22 E32 J21 J60 O4
    Date: 2014–05

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