nep-eff New Economics Papers
on All new papers
Issue of 2014‒09‒08
eight papers chosen by
Angelo Zago
Università degli Studi di Verona

  1. Agricultural extension and technical efficiency of tea production in northeastern Vietnam By Phu Nguyen-Van; Nguyen To-The
  2. Real wages and labor-saving technical change: evidence from a panel of manufacturing industries in mature and labor-surplus economies By Joao Paulo A. de Souza
  4. Health information, treatment, and worker productivity: Experimental evidence from malaria testing and treatment among Nigerian sugarcane cutters By Andrew Dillon; Jed Friedman; Pieter Serneels
  5. Assessing the efficiency of payments for biodiversity conservation: A bio-econometric analysis of Natura 2000 contracts in forest By Emeline Hily; Serge Garcia; Anne Stenger; Gengyang Tu
  6. How scale and institutional setting explain the costs of small airports? -An application of spatial regression analysis By Tolga Ülkü; Vahidin Jeleskovic; Jürgen Müller
  8. The efficiency of educational production: A comparison of Denmark with other OECD countries By Peter Bogetoft; Eskil Heinesen; Torben Tranæs

  1. By: Phu Nguyen-Van; Nguyen To-The
    Abstract: This study uses the stochastic production frontier to analyze technical efficiency of tea production in northeastern Vietnam. Our study estimated that the average technical efficiency of tea production is very low, only about 32%. Technical efficiency can be improved by having a training on sale skills whereas it can be negatively affected by access to information on tea market. The results indicated that there are a big potential for improving technical efficiency in tea production by using the available inputs and technology. For the purpose of improving efficiency, efforts should be made on agricultural extension (keeping the current form of training on sale skills, modifying the provision of information on tea market). Producers are also recommended to be more careful on the adoption of tea variety for their cultivation.
    Keywords: Agriculture extension; technical efficiency; stochastic frontier; translog; tea production
    JEL: C21 D24 Q12 Q18
    Date: 2014–08–29
  2. By: Joao Paulo A. de Souza (Department of Economics, University of Massachusetts, Amherst)
    Abstract: This paper uses panel cointegration and error correction models to unveil the direction of long-run causality between the real product wage and labor productivity at the industry level. I use two datasets of manufacturing industries: the EU-Klems dataset covering 11 industries in 19 developed economies, and the Unido Industrial Statistics Database covering 22 industries in 30 developed and developing economies. In both datasets, I find evidence of cointegration between the two variables, as well as evidence of two-way, long-run Granger causality. These findings are consistent with theories of directed technical change, which claim that a rise in labor costs sparks the adoption of labor-saving innovations. They are also consistent with distributive theories whereby real wages keep apace of labor productivity growth, giving rise to long-run stability in functional distribution.
    Keywords: Technological Change, Wage Shares, Labor Productivity, Panel Cointegration
    JEL: B5 E25 O33
    Date: 2014
  3. By: Thai-Thanh Dang; Annabelle Mourougane
    Abstract: The objective of this paper is to estimate the effect on MFP of air pollution in 7 ASEAN economies (Cambodia, Indonesia, Lao PDR, Malaysia, Philippines, Thailand and Vietnam) and China. For this purpose, standard measures of MFP are corrected for the impact of pollution applying the framework developed by Brandt et al. (2013), and valuing pollution through country-specific time-varying shadow price estimates for CO2, SOx, NOx and PM10, derived from an output distance function approach. Shadow prices of pollutants, the opportunity cost of abating pollution in the form of reduced output, are found to vary widely across economies, depending on national environmental regulations, the use of inefficient abatement technologies, and the structure of the economy. In all countries but Cambodia, shadow prices of the various pollutants experience a downward trend since the Asian crisis, suggesting that ASEAN countries and China have strengthened their regulatory framework and encouraged the adoption of clean technologies. Accounting for pollution leads to very different adjustments to standard MFP measures across countries. In most countries the adjustment is positive, suggesting that standard MFP measures have tended to underestimate the true measure. Such correction would be above 2 percentage points in Lao PDR and the Philippines. It is estimated to be around 1 percentage point in China, Indonesia and Thailand and about half that size in Malaysia. It would be negative in Cambodia in this country and nil in Vietnam.
    Date: 2014–08–29
  4. By: Andrew Dillon (Michigan State University); Jed Friedman (World Bank); Pieter Serneels (University of East Anglia)
    Abstract: Agricultural and other physically demanding sectors are important sources of growth in developing countries but prevalent diseases such as malaria adversely impact the productivity, labor supply, and occupational choice of workers in these sectors by reducing physical capacity. This study identifies the impact of malaria on worker earnings, labor supply, and daily productivity by randomizing the temporal order at which piece-rate workers at a large sugarcane plantation in Nigeria are offered malaria testing and treatment. The results indicate a significant and substantial intent to treat effect of the intervention – the offer of a workplace based malaria testing and treatment program increases worker earnings by approximately 10% over the weeks following the mobile clinic visit. The study further investigates the effect of health information by contrasting program effects by workers revealed health status. For workers who test positive for malaria, the treatment of illness increases labor supply, leading to higher earnings. For workers who test negative, and especially for those workers most likely to be surprised by the healthy diagnosis, the health information also leads to increased earnings via increased productivity. Possible mechanisms for this response include selection into higher return occupations as a result of changes in the perceived cost of effort. A model of the worker labor decision that includes health perceptions in the decision to supply effort suggests that, in endemic settings with poor quality health services, inaccurate health perceptions may lead workers to misallocate labor thus resulting in sub-optimal production and occupational choice. The results underline the importance of medical treatment but also of access to improved information about one’s health status, as the absence of either may lead workers to deliver lower than optimal effort levels in lower return occupations.
    Keywords: malaria, labor supply, labor productivity, randomized experiment
    JEL: I21 J22 J24 O12
  5. By: Emeline Hily (Laboratoire d'Economie Forestière, INRA - AgroParisTech); Serge Garcia (Laboratoire d'Economie Forestière, INRA - AgroParisTech); Anne Stenger (Laboratoire d'Economie Forestière, INRA - AgroParisTech); Gengyang Tu (Laboratoire d'Economie Forestière, INRA - AgroParisTech)
    Abstract: In this article, we empirically assess the efficiency of Natura 2000 contracts in forest, a payment for environmental service (PES) scheme, aiming at biodiversity conservation. To do so, we perform a bio-econometric analysis of public and private contracts in France. We estimate a cost function for biodiversity provision, in which the level of biodiversity output is quantified by a biodiversity index value. Estimation results show that payments for Natura 2000 contracts are inadequately defined. While payments’ definition considers opportunity costs linked to landvalue, the latter neglects opportunity costs associated with foregone profits from timber production. This impedes satisfactory participation, especially from private forest owners, whose forests could bring interesting results in terms of cost-efficiency. We show that the cost elasticity of biodiversity provision is significantly lower than one, suggesting to implement ecologically more ambitious contracts with lower average costs. Public owners are able to bear higher opportunity costs than private owners.
    Keywords: Resource management, Payment for environmental service, forest, biodiversity index, provision cost of biodiversity
    JEL: C31 D04 Q23 Q57 Q58
    Date: 2015–01
  6. By: Tolga Ülkü (University of Berlin); Vahidin Jeleskovic (University of Kassel); Jürgen Müller (University of Berlin)
    Abstract: One of the main pillars of efficient airport operations is cost-minimization. Unit costs of operation with respect to the level of passengers served are a possible proxy to measure the cost efficiency of an airport. Due to compound production framework and sophisticated political-economic environment of airports, estimation of airport costs requires detailed specifications. Airport cost functions should be able to explain the total costs with the main inputs labor, material and capital as well as by taking the airport specific characteristics into account. In this paper, we apply such an approach and focus on airport specific characteristics. We use a spatial regression methodology to explain how these drive the unit costs and analyze the spatial relationship among the dependent variables. Two separate data samples from Norwegian and French airports are used in this research to test various hypotheses. Because a large number of regional airports in both countries cannot reach financial break-even, our first research question deals with the effects of subsidies, which often follow regional and political considerations. One must therefore find an efficient way to maintain these airports without any distortions on the incentives. When evaluating the relationship between subsidies and unit costs, we find negative effect of subsidies on airport cost efficiency. Second, we evaluate the importance of economies of scale by focusing on the relationship between airport size and unit costs. Finally, the results of spatial regression show that a denser spatial distribution of airports results in higher unit costs as a consequence of lower capacity utilization, indicating the negative effect of spatial competition on airport unit costs within an airport network.
    Keywords: Airport costs, airport subsidies, spatial regression, scale economies
    JEL: C23 C51 R11 R42
    Date: 2014
  7. By: Thai-Thanh Dang; Annabelle Mourougane
    Abstract: The objective of this paper is to estimate time variant shadow prices for CO2, SOx, NOx and PM10 in 19 OECD countries over the period 1990-2008 relying on an output distance function approach. Shadow prices for pollutants are found to vary widely across countries, depending on national environmental regulations, the use of inefficient abatement technologies and the structure of the economy. All countries but Korea experienced a decline in CO2 and NOx prices over the period 1990-2008, with the bulk of the decrease occurring since 2000. This suggests that most OECD countries have strengthened their regulatory framework and encouraged the adoption of clean technologies since the 2000s. Estimates of shadow prices of PM10 appear to be extremely variable across countries. Contrary to what is observed for CO2 and NOx, steep declines have occurred in both 1990-2000 and 2000-2008 sub-periods. The empirical work undertaken in this paper could easily be replicated to other countries, and is relatively parsimonious in terms of data.
    Date: 2014–08–29
  8. By: Peter Bogetoft (Department of Economics, Copenhagen Business School); Eskil Heinesen (Rockwool Foundation Research Unit); Torben Tranæs (Rockwool Foundation Research Unit)
    Abstract: Denmark, Norway, New Zealand, Canada and the USA are the OECD countries that spend most on education, measured in relation to GDP. Focusing in particular on upper secondary education, this paper examines whether the heavy expenditure on education in Denmark is matched by high output from the educational sector, both in terms of a large number of students enrolled in educational programmes and a high completion rate. The methodology used is to compare (benchmark) Denmark with a relevant group of countries and to calculate how much cheaper Denmark could teach the same number of students and maintain the same graduation/completion rates as today if the country could achieve the same level of cost effectiveness as its most efficient counterparts. Comparing Denmark to a group of the richest OECD countries reveals that potential savings lie between 12 and 34 percent. Figures that fall to between zero and nine percent when a comparison is made between Denmark and other Northern European countries. On the input side, the slightly weaker academic level among young people in Denmark on completion of lower secondary education – as measured by the PISA scores of the various countries – goes some way to explain the higher costs of upper secondary education. On the output side, if earnings and levels of employment among those who complete their education are taken into account, then Denmark is in fact found to be efficient. However, this high level of efficiency has become less clear-cut in recent years, since expected earnings (multiplied by rate of employment) is currently falling in comparison with the expected earnings in the peer countries. This might be an indication that Denmark’s current position is not stable, unless the present situation is entirely attributable to the economic downturn in the wake of the financial crisis.
    Date: 2014–08

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