nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2018‒09‒10
twenty-six papers chosen by
Angelo Zago
Università degli Studi di Verona

  1. Technology gaps and leaps in the sustainable development of English cereal and general cropping farms By Iliakis, Konstantinos; Gadanakis, Yiorgos; Park, Julian
  2. The effect of the implementation of the 2003 Mid-Term Review of the CAP on technical efficiency of beef production. A comparative analysis By Cillero, Maria Martinez; Breen, James; Thorne, Fiona; Wallace, Michael
  3. How can the productivity of Indonesian cocoa farms be increased? By Andras Tothmihaly,; Verina Ingram.
  4. The dynamic Luenberger-Hicks-Moorsteen productivity indicator with an application to dairy farms in South West England By Ang, Frederic; Kerstens, Pieter Jan
  5. Measuring Total Factor Productivity on Irish Dairy Farms: A Fisher Index Approach using Farm Level Data By McCormack, Michele; Thorne, Fiona; Hanrahan, Kevin
  6. Market Constraints, Misallocation, and Productivity in Vietnam Agriculture By Stephen Ayerst; Loren Brandt; Diego Restuccia
  7. Labour input and technology adoption on Irish dairy farms post-quota By Dillon, Emma Jane; Moran, Brian
  8. Nitrogen use efficiency of milk production – A comparative study of the Republic of Ireland and the Netherlands By Buckley, Cathal; Daatselaar, C.H.G; Hennessy, Thia; Vrolijk, Hans
  9. Misallocation and intersectoral linkages By Sophie Osotimehin; Latchezar Popov
  10. The Dynamic Effects of Investment Support of the EU Rural Developent Programme on Czech Farms' Structure and Performance By Ratinger, T.; Curtiss, J.; Medonos, T.; Hruska, M.
  11. Direct payments and competitiveness. Assessing redistributive effects of internal convergence in Italy By Bonfiglio, Andrea; Henke, Roberto; Pierangeli, Fabio; D’Andrea, Maria Rosaria Pupo
  12. Structural convergence between the dairy sectors of the EU-27 Member States since the Eastern Enlargement By Jong, Winand de; Ihle, Rico; Jongeneel, Roel
  13. Profit Efficiency, DEA, FDH and Big Data By Valentin Zelenyuk
  14. Where are the economies of scale in Canadian banking? By McKeown, Robert
  15. Design of insolvency regimes across countries By Muge Adalet McGowan; Dan Andrews
  16. Testing the Quiet Life Hypothesis in the African Banking Industry By Asongu, Simplice; Odhiambo, Nicholas
  17. Costs, size and returns to scale among Canadian and U.S. commercial banks By McKeown, Robert
  18. Technical Inefficiency of Chili Farms in Thailand By Krasachat, Wirat
  19. How Does Energy-Cost Lead to Energy Efficiency? Panel Evidence from Canada By Gamtessa, Samuel; Olani, Adugna
  20. Labour share developments over the past two decades: The role of technological progress, globalisation and “winner-takes-most” dynamics By Cyrille Schwellnus; Mathilde Pak; Pierre-Alain Pionnier; Elena Crivellaro
  21. Synopsis: The role of the locations of public sector varietal development activities on agricultural productivity By Takeshima, Hiroyuki; Nasir, Abdullahi Mohammed
  22. How can the environmental efficiency of Indonesian cocoa farms be increased? By Andras Tothmihaly,; Stephan von Cramon-Taubadel,; Verina Ingram.
  23. The Supply of Skill and Endogenous Technical Change: Evidence from a College Expansion Reform By Carneiro, Pedro; Liu, Kai; Salvanes, Kjell G.
  24. Some Mathematical and Historical Clariffcations on Aggregation in Effciency and Productivity Analysis and Connection to Economic Theory By Valentin Zelenyuk
  25. Assessing the regional efficiency of Swedish agriculture under the CAP ‒ a multidirectional efficiency approach By Manevska-Tasevska, Gordana; Hansson, Helena; Asmild, Mette; Surry, Yves
  26. Analyzing Total Factor Productivity Effects of Agricultural Policies and Climate Change Using Production Function Models By Toland, Gerald D.; Onyeaghala, Raphael O.

  1. By: Iliakis, Konstantinos; Gadanakis, Yiorgos; Park, Julian
    Abstract: Identifying and assessing technology gaps and technology leaps observed in the agricultural productivity change analysis is of paramount importance since it enables the identification of a set of effects that influence the way that inputs are transformed into outputs and resources are allocated between diversified farm activities. Previous studies have ignored the importance of heterogeneity between different farming systems and their characteristics and have also failed to account for the different rates of technology absorption with respect to an unrestricted universal production frontier considering simultaneous generation of main products and by-products. Furthermore, the technology leaps defined as varying rates of technology absorption over time with respect to the unrestricted universal production frontier may lead to miss-specified local production functions and biased efficiency and productivity change estimates. The analysis focused on the regional variation of the production environment, farm specialisation and level of engagement as constraints to productivity gains. By considering two different levels of endogenous and exogenous heterogeneity in the production environment, the analysis used data from the Farm Business Survey of English arable farms for the years 2005-2013 and employed the parametric stochastic meta-frontier analysis to measure sustainable productivity change as producers engage into agricultural and diversified activities as alternative sources of income. The model approaches simultaneous value-adding generation processes to reveal the relationship between change in producers’ endowments and productivity gains in a network application under uncertainty.
    Keywords: Productivity Analysis, Research and Development/Tech Change/Emerging Technologies
    Date: 2017–04–25
  2. By: Cillero, Maria Martinez; Breen, James; Thorne, Fiona; Wallace, Michael
    Abstract: The 2003 Mid-Term Review introduced decoupled payments as part of the Common Agricultural Policy; however it allowed the maintenance of limited coupled support. As a result, there are significant differences in subsidies granted in each Member State. We aim to explore the effects on technical efficiency of the different implementations of support payments in the beef sector in selected countries. This analysis contributes to the literature by exploring the effects of both coupled and decoupled support payments on farm level economic performance. For this purpose, country specific output distance functions are estimated together with the effects of a series of technical efficiency drivers, including subsidies, implementing stochastic frontier analysis. Unbalanced panel datasets for France, Ireland, Germany, Scotland and England and Wales are built using Farm Accountancy Data Network information, for the years 2005 to 2012. Our estimates show that decoupled payments had a positive effect on efficiency in all countries, while the retention of coupled support had a significant negative impact on technical efficiency on French beef farms. This suggests that the maintenance of coupled support might compromise farm economic performance in the sector.
    Keywords: Agricultural and Food Policy, Farm Management, Livestock Production/Industries
    Date: 2017–04–24
  3. By: Andras Tothmihaly,; Verina Ingram.
    Abstract: This study investigates the Indonesian cocoa production to reveal the possibilities for poverty alleviation while considering the threats to environmental sustainability. We estimate, based on a large household panel data set and stochastic frontier analysis, the technical efficiency of cocoa production and decompose productivity growth. According to our results, the productivity of Indonesian cocoa farming increased by 75 percent between 2001 and 2013. Technical efficiency growth and the increased chemicals use supported by government subsidies were responsible for the majority of this gain. Furthermore, we find large distortions in the input allocations. Hence, policies that encourage the adjustment of the cocoa farms’ input use would be highly beneficial. Moreover, because of the weather-induced volatility in cocoa production, policy makers should also promote investment in agricultural research and transfer of drought-resistant cocoa varieties to farmers. Additionally, the average efficiency of cocoa farmers is estimated to be around 50 percent. We find that farmers’ educational attainment and their experience in cocoa farming are significant factors that can increase the efficiency levels.
    Keywords: Community/Rural/Urban Development, Crop Production/Industries, Food Security and Poverty, Land Economics/Use
    Date: 2017–07–05
  4. By: Ang, Frederic; Kerstens, Pieter Jan
    Abstract: This paper introduces a dynamic Luenberger-Hicks-Moorsteen (LHM) productivity indicator that takes into account the adjustment costs of changing the level of quasi-fixed capital inputs. Being additively complete in the dynamic sense, the LHM indicator is decomposed into contributions of outputs, variable inputs and investments in dynamic factors. Moreover, we decompose the LHM indicator into technical change, technical inefficiency change and scale ineffi- ciency change using an investment-, output- and input-direction. Employing a nonparametric framework, the empirical application focuses on the dairy sector in South West England over the period 2001 − 2014.
    Keywords: Farm Management, Productivity Analysis, Research Methods/ Statistical Methods
    Date: 2017–04–25
  5. By: McCormack, Michele; Thorne, Fiona; Hanrahan, Kevin
    Abstract: This paper presents a Fisher index measure of the total factor productivity (TFP) performance of Irish dairy farms over the period 2006-2016 using Teagasc National Farm Survey (NFS) data. The removal of milk quotas in 2015 has led to an increase of over 30% in dairy cow numbers since 2010, and although Suckler cow numbers have dropped slightly, the total number of cows in Ireland has reached an all-time high of 2.5 million head. This large increase adds to the environmental pressures attributed to agricultural output, and puts the focus firmly on how efficiently the additional agricultural output associated with higher cow numbers is produced. The primary purpose of this paper is to identify a standardised measure of the TFP performance of Irish dairy farms that can be routinely updated using Teagasc NFS data. We find that relative to 2010 the TFP of Irish dairy farms has increased by 17%, however in one production year, 2014-2015, when milk quota was removed, the TFP measure increased by 10%. TFP grew by 3% in the production year 2015-2016, it would seem therefore that the removal of the European dairy quota system has resulted in a windfall gain for Irish Dairy farmers but that productivity gains are continuing. Future data will be required to investigate the longer term TFP performance of Irish dairy farms in the post milk-quota era.
    Keywords: Agricultural and Food Policy, Livestock Production/Industries
    Date: 2018–04–16
  6. By: Stephen Ayerst; Loren Brandt; Diego Restuccia
    Abstract: We examine important changes in agriculture in Vietnam in the context of ongoing structural changes in the economy. We use a household-level panel dataset and a quantitative framework to document the extent and consequences of factor misallocation in agriculture during the period between 2006 and 2016. Despite rapid growth in agricultural productivity and a reallocation of factor inputs to more productive farmers, we find that misallocation across farmers remains high and increased during the period. Reallocation of factor inputs has not been strong enough to accommodate substantial changes in farm productivity over time. Our analysis also reveals important differences between the north and south regions.
    Keywords: agriculture, misallocation, Vietnam, productivity, regions.
    JEL: O11 O14 O4 E02 Q1
    Date: 2018–08–22
  7. By: Dillon, Emma Jane; Moran, Brian
    Abstract: The continued sustainable growth of Irish agriculture is dependent on further productivity and efficiency gains. The adoption of output enhancing technologies is critical in this regard. Additional labour input will also be required, particularly in the dairy sector where milk output has increased on 80% of farms since 2014. The considerable structural change experienced in Irish dairy farming over the past decade is reflected in Teagasc National Farm Survey (NFS) data indicating that a growing percentage of farms now have a herd size of greater than 100 cows. Further expansion in the dairy sector will result in an increased demand for hired labour, particularly at peak times of the year e.g. calving. Innovations like contract rearing and collaborative farming as well as labour saving technologies such as automatic milking are also becoming more commonplace. Despite this, the role of owned family labour remains critical and the management component of this labour is of growing importance. In line with EU Farm Accounts Data Network (FADN) methodology, the Teagasc NFS currently captures the unpaid family component of farm labour through self-reported hours worked on an annual basis. Drawing on productivity studies undertaken elsewhere this scoping study aims to further investigate the contribution of labour in a more disaggregated fashion, an important exercise given seasonal differences in labour demand. One component of this proposed work is to undertake a “Time Use Study” across a sub-sample of TNFS farms. This will serve to both validate and improve upon data already collected within the survey and will prove useful for stakeholders in understanding the extent to which labour input (owned and hired) has the potential to represent a constraint on production growth. This would be the first time Teagasc NFS data would be utilised in conjunction with such data and would prove a useful benchmarking exercise. Insights into the extrinsic and intrinsic factors influencing farmer uptake of technologies (some of which may be labour saving) will also be investigated using econometric methods. From a sustainability perspective this study will provide a better understanding of Irish farm labour demand and the implications for current/future work-life balance of on-going sectoral growth. Existing farm-level sustainability indicators find a correlation between economic performance and technology adoption but questions remain as to the key drivers of innovation across systems. This study aims to explore this further building on previous work which confirmed the important role of extension and education in this regard.
    Keywords: Agricultural and Food Policy, Labor and Human Capital, Livestock Production/Industries
    Date: 2018–04–16
  8. By: Buckley, Cathal; Daatselaar, C.H.G; Hennessy, Thia; Vrolijk, Hans
    Abstract: Policymakers are increasingly interested in the sustainability of milk production due to the intensive nature of the production system and the associated risk to the environment. This study uses national extensions of the EU Farm Accountancy Data Network to derive nationally representative farm gate level nitrogen use efficiency indicators for specialist dairy farms in the Republic of Ireland and the Netherlands between 2006 and 2014. The Republic of Ireland and the Netherlands are of particular interest as dairy production is an important sector in both countries and milk production has grown in these two Member States following the removal of the EU milk quota regime in 2015. Results indicate relatively similar N balances per hectare across both countries with the Netherlands returning significantly higher N use efficiency and lower N surplus per kg of milk solids produced. Results generally show improvements in nutrient use over the study period across both countries, due to efficiency gains, but highlight differences between a grazed grass system and a more concentrate feed high input orientated system and illustrate the need for the development of a life-cycle analysis approach to fully capture the full scale environmental efficiency of differing systems of milk production.
    Keywords: Agricultural and Food Policy, Environmental Economics and Policy, Livestock Production/Industries
    Date: 2017–04–24
  9. By: Sophie Osotimehin (University of Virginia); Latchezar Popov (Texas Tech University)
    Abstract: We study the effects of distortions in the use of primary and intermediate inputs on aggregate productivity. We show analytically how the aggregate productivity loss from distortions depends on the input-output structure of the economy and the degree of complementarity between inputs. We find that the production network does not systematically amplify the aggregate productivity loss, and that higher complementarity between inputs reduce the effects of distortions. Then, we apply our framework to quantify the effects of distortions caused by market power. Calibrated on Mexican industry-level data, the model suggests that reducing industry-level markups in Mexico to the US levels could raise aggregate TFP by as much as 15 percent. The TFP gain is as much as 5 times larger than without input-output linkages.
    Date: 2018
  10. By: Ratinger, T.; Curtiss, J.; Medonos, T.; Hruska, M.
    Abstract: The objective of the paper is to assess economic and structural effects of the measure “Modernisation of Agricultural Holdings” of the Rural Development Programme 2007-2013 on the Czech farms. A particular attention is paid to its dynamic and time-differentiated impacts. We use Direct Covariate Matching to address issues of potential selection bias, simultaneity bias or functional form misspecification. Our empirical results show significant short as well as long-term investment support effects, which, however, markedly vary between support periods. This may relate to the rapidly changing overall financial and investment conditions for agriculture. The investment support of the earlier period of 2008-2011 which overlaps with the time of economic crisis is found to have larger and more significant structural and performance effects than later investment support. It resulted in significant ruminant production expansion at the expense of farm cost efficiency, but contributed to a short-term TFP increase. These effects of support vanished in the latter periods characterized by favourable financial conditions. For this period, we find negative effects of investment support on total factor productivity that could indicate loss of additionality of investment support and/or differences in type of investments and their productivity realized by supported and non-supported farms.
    Keywords: Agricultural and Food Policy, International Relations/Trade
    Date: 2018–07
  11. By: Bonfiglio, Andrea; Henke, Roberto; Pierangeli, Fabio; D’Andrea, Maria Rosaria Pupo
    Abstract: The objective of the paper is twofold. Firstly, investigating the relationship between competitiveness, measured by technical efficiency, and direct payments of a sample of Italian farms prior to the application of the 2014-2020 CAP reform. Secondly, evaluating possible implications of alternative scenarios about distribution of direct payments on technical efficiency. To these aims, a data envelopment analysis approach in conjunction with a double bootstrapped left-truncated regression model are adopted. Results indicate that direct payments are negatively associated with technical efficiency. Moreover, they show that redistribution of policy subsidies especially towards more inefficient farms provokes a decrease in overall technical efficiency.
    Keywords: Agricultural and Food Policy
    Date: 2018–04–26
  12. By: Jong, Winand de; Ihle, Rico; Jongeneel, Roel
    Abstract: Cohesion is one of the core goals of European integration. In 2004 and 2007, the EU welcomed twelve new members which added their agricultural sectors to the EU’s single market. Especially their dairy sectors showed substantial competitive disparities to old Member states. We therefore examine structural convergence in farm-gate milk prices, productivity and farm income across EU’s regional dairy sectors since 2004. We find that price dispersion decreased from 2004-2007. Kernel density plots and Markov chain estimates show that there was a high probability for regions to stay in the lower income- and productivity classes.
    Keywords: Agricultural and Food Policy
    Date: 2018–04–26
  13. By: Valentin Zelenyuk (CEPA - School of Economics, The University of Queensland)
    Abstract: The goal of this article is to outline a very simple way of estimating profit efficiency in the DEA and FDH frameworks, but avoiding the computational burden of linear programming. With this result it is possible to compute profit efficiency even when dimension of inputs and outputs are larger than the dimension of number of decision making units (firms, individuals, etc.), as is often the case in the `big data'.
    Date: 2018–08
  14. By: McKeown, Robert
    Abstract: Using a new data set from the Office of the Superintendent of Financial Institutions, I conduct an in-depth study on cost efficiency and returns to scale (RTS) in Canadian banking. I estimate a transcendental log cost function for the six largest Canadian commercial banks which account for approximately 90% of chartered bank assets over the 1996-2011 sample period. The minimal amount of firm entry and exit simplifies many difficulties in the analysis, and the panel dynamic ordinary least squares estimator (PDOLS) provides less biased results than the fixed-effect OLS. Departing from previous studies in banking, I calculate whether the estimated cost function satisfies the microeconomic properties of a monotonicity and price concavity. To my knowledge, this is the first paper to find evidence of constant RTS among the Canadian banks. The result is robust to a number of different asset and price specifications. Furthermore, there is little evidence to suggest cost inefficiencies among the large Canadian banks. This is true whether the Greene (2005) true fixed effects ML estimator is estimated or a distribution-free approach is measured. Combining these two results, the large Canadian banks managed costs efficiently and minimized costs from 1996 to 2011.
    Keywords: Financial Economics, International Development
    Date: 2017–04
  15. By: Muge Adalet McGowan; Dan Andrews
    Abstract: This paper explores cross-country differences in the design of insolvency regimes, based on quantitative indicators constructed from countries’ responses to a recent OECD policy questionnaire. The indicators – which are available for 36 countries for 2010 and 2016 – aim to better capture the key design features of insolvency which impact the timely initiation and resolution of personal and corporate insolvency proceedings. According to these metrics, the design of insolvency regimes varies significantly across countries, with important differences emerging with respect to the treatment of failed entrepreneurs, the availability of preventative and streamlining tools and ease of corporate restructuring. While a comparison of indicator values for 2010 and 2016 imply that recent reform efforts have improved policy design, there remains much scope to reform insolvency regimes in many OECD countries. This is particularly significant in light of complementary analysis which shows that the design of insolvency regimes is relevant for understanding three inter-related sources of contemporary labour productivity weakness: the survival of “zombie” firms, capital misallocation and stalling technological diffusion.
    Keywords: capital misallocation, firm exit, personal and corporate insolvency, productivity, zombie firms
    JEL: D24 K35 O40 O43 O47
    Date: 2018–09–11
  16. By: Asongu, Simplice; Odhiambo, Nicholas
    Abstract: The Quiet Life Hypothesis (QLH) is the pursuit of less efficiency by firms. In this study, we assess if powerful banks in the African banking industry are increasing financial access. The QLH is therefore consistent with the pursuit of financial intermediation inefficiency by large banks. To investigate the hypothesis, we first estimate the Lerner index. Then, using Two Stage Least Squares, we assess the effect of the Lerner index on financial access proxied by loan price and loan quantity. The empirical evidence is based on a panel of 162 banks from 42 African countries for the period 2001-2011. The findings support the QLH, although quiet life is driven by the below-median Lerner index sub-sample. Policy implications are discussed.
    Keywords: Financial access; Bank performance; Africa
    JEL: D40 G20 G29 L10 O55
    Date: 2018–01
  17. By: McKeown, Robert
    Abstract: I compare returns to scale in the U.S. and Canadian banking system from 1996 to 2015. I estimate a parametric trans-log cost function and, for robustness, an inputoriented distance function. I do this in a way that is commensurate with the limitations of these models. Among the ten largest commercial banks, I find evidence for small but statistically significant increasing returns to scale (RTS). This reflects the descriptive data that offers little evidence for extremely large scale economies. Comparatively, I find constant RTS for the Canadian banks. They paid fewer costs per asset, particularly lower labour costs and legal penalties. Comparing income statement items, I find that, despite higher firm concentration in Canada, the U.S. banks had higher net interest margin rate, paid a lower rate of interest on funds, and had higher credit losses per financial assets. If the U.S. banking system is more competitive, this questions whether an increase in bank competition will create a net positive outcome for society.
    Keywords: Financial Economics
    Date: 2017–04
  18. By: Krasachat, Wirat
    Abstract: The primary purpose of this study is to measure and investigate factors affecting technical inefficiency of chili farms in Thailand. This study applies a stochastic frontier production function approach to measure farm-specific technical inefficiency using the 2013 farm-level cross-sectional survey data of Thai chili farms in a single estimation technique applying the maximum likelihood estimation method. The non-negative technical inefficiency effects are modeled as a function of farm-specific management and socio-economic factors. The empirical results suggest two important findings. First, there is confirmation that the difference in variety used has influenced the technical inefficiency of chili farms. Second, good agricultural practice (GAP) also has different impacts on technical inefficiency in Thai chili production in different farms.
    Keywords: Agricultural and Food Policy, Crop Production/Industries, Productivity Analysis
    Date: 2017–04–26
  19. By: Gamtessa, Samuel; Olani, Adugna
    Abstract: An increase in energy-cost can induce energy effciency improvement - a reduction in energy-output ratio. There are well-established theoretical conjectures of how this can take place. As the relative energy-cost increases, it induces firms to reallocate and selectively utilize the most energy-effcient vintages. In the long-run firms could also achieve energy effciency through investments in energy-effcient capital. This study uses the Canadian KLEMS panel data set to investigate these relationships. We employ panel vector auto regressions as well as co-integration and error correction techniques to test whether the conjectures hold in the data. Our findings support the theoretical conjectures. The channels we empirically identify suggest that the effect of increased energy-cost can be an increase in energy effciency: by decreasing energy-capital ratio and increasing output-capital ratio. The latter effect is observed only in the long-run through induced investments in new capital.
    Keywords: Financial Economics
    Date: 2016–09
  20. By: Cyrille Schwellnus; Mathilde Pak; Pierre-Alain Pionnier; Elena Crivellaro
    Abstract: Over the past two decades, real median wage growth in many OECD countries has decoupled from labour productivity growth, partly reflecting declines in labour income shares. This paper analyses the drivers of labour share developments using a combination of industry- and firm-level data. Technological change in the investment goods-producing sector and greater global value chain participation have compressed labour shares, but the effect of technological change has been significantly less pronounced for high-skilled workers. Countries with falling labour shares have witnessed both a decline at the technological frontier and a reallocation of market shares toward “superstar” firms with low labour shares (“winner-takes-most” dynamics). The decline at the technological frontier mainly reflects the entry of firms with low labour shares into the frontier rather than a decline of labour shares in incumbent frontier firms, suggesting that thus far this process is mainly explained by technological dynamism rather than anti-competitive forces.
    Keywords: global value chains, Labour share, skills, superstar firms
    JEL: D33 J24 L11 O33
    Date: 2018–09–04
  21. By: Takeshima, Hiroyuki; Nasir, Abdullahi Mohammed
    Abstract: Despite the importance of location-specific adaptive crop breeding research, past reforms of breeding systems in Nigeria have focused on centralizing breeding activities into fewer locations. This has been based partly on the premise that such research systems can still effectively meet the need for a diverse set of crop varieties suited for different agroecological conditions by using numerous outstations and multilocational trials. However, little empirical evidence exists to support this premise. Using panel data from farm households in northern Nigeria and spatial data on agroecological factors, this study shows that crop productivity and technical efficiency at farm household level is positively affected by the degree of similarity between the agroecological conditions of the locations of these households and where major crop breeding institutes are headquartered. Where improved varieties are developed affects crop productivity in different locations.
    Keywords: Agricultural and Food Policy, Food Security and Poverty, International Development
    Date: 2017–10–10
  22. By: Andras Tothmihaly,; Stephan von Cramon-Taubadel,; Verina Ingram.
    Abstract: We look at the trade-off between smallholder cocoa intensification and the ecosystem in Indonesia and investigate the determinants of environmental efficiency in cocoa production. In our analysis, we apply a distance output function that includes cocoa production and the abundance of native rainforest plants as outputs. Our data set, based on a household and environment survey conducted in 2015, allows us to analyze 208 cocoa producers with both measured and self-reported data. We find that the intensification of cocoa farms results in higher ecosystem degradation. Additionally, the estimations show substantial mean inefficiencies (50 percent). On average, the efficiency scores point to a possible production expansion of 367 kg of cocoa per farm and year, to a possible increase of 43680 rainforest plants per farm, or to a possible acreage reduction of 0.52 hectares per farm. Finally, our results show that agricultural extension services have a substantial role in increasing efficiency.
    Keywords: Environmental Economics and Policy
    Date: 2017–07–05
  23. By: Carneiro, Pedro (University College London); Liu, Kai (University of Cambridge); Salvanes, Kjell G. (Norwegian School of Economics)
    Abstract: We examine the labor market consequences of an exogenous increase in the supply of skilled labor in several cities in Norway, resulting from the construction of new colleges in the 1970s. We find that skilled wages increased as a response, suggesting that along with an increase in the supply there was also an increase in demand for skill. We also show that college openings led to an increase in the productivity of skilled labor and investments in R&D. Our findings are consistent with models of endogenous technical change where an abundance of skilled workers may encourage firms to adopt skill-complementary technologies, leading to an upward-sloping long-run demand for skill.
    Keywords: endogenous technical change, college reform
    JEL: J23 J24
    Date: 2018–07
  24. By: Valentin Zelenyuk (CEPA - School of Economics, The University of Queensland)
    Abstract: In this note we clarify a few important aspects about aggregation in effiency and productivity analysis. By doing so we also sketch a brief historical map on how the area of aggregation in effciency and productivity analysis has been developing to where it is now and its connection to classic studies in economic theory.
    Keywords: Aggregation, Scale Effciency, Industry Effciency, Duality.
    JEL: D24 C43 L25
    Date: 2018–04
  25. By: Manevska-Tasevska, Gordana; Hansson, Helena; Asmild, Mette; Surry, Yves
    Abstract: The regional dimension is central when designing structural reforms for rural areas. In this study we implement the multidirectional efficiency analysis approach in a regional, rural development context, with the aim of analysing the regional efficiency of agricultural resource use. The efficiency patterns of each input and output were observed over three Common Agricultural Policy (CAP) periods. The results show the largest improvements in the efficiency of diversified output and labour, especially when concerns about environmental conditions and rurality were included in CAP, 2008-2013. Further improvements in regional efficiency could be achieved by creating possibilities for diversified output and structural changes in assets.
    Keywords: Agricultural and Food Policy
    Date: 2018–04–26
  26. By: Toland, Gerald D.; Onyeaghala, Raphael O.
    Abstract: Our global agricultural economy is challenged with serving the nutritional needs of nine billion people by the year 2050. An estimated seventy-percent increase in agricultural production capacity is needed over the next thirty-five years to balance the growth trends of worldwide food supply and demand. To investigate fundamental aspects of this challenge, we utilize a USDA-ERS production model (2003)i and an OECD model of sustainable growth to examine the economic factors required for sustainable Total Factor Productivity (TFP) growth.ii We also review the effects of alternative institutional approaches, research funding policies, new technologies and climate change effects as critical determinants of global TFP growth rates required to meet growing worldwide food demands.
    Keywords: Environmental Economics and Policy
    Date: 2018–04–16

This nep-eff issue is ©2018 by Angelo Zago. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.