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on Efficiency and Productivity |
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Issue of 2024‒06‒10
six papers chosen by |
| By: | Rachita Gulati (Indian Institute of Technology Roorkee) |
| Abstract: | The development of a comprehensive suite of packages and commands within Stata has empowered researchers to conduct frontier efficiency and productivity assessments effectively. |
| URL: | http://d.repec.org/n?u=RePEc:boc:indi23:02&r= |
| By: | Stephen Ayerst; Loren Brandt; Diego Restuccia |
| Abstract: | In less developed economies the allocation of factor inputs to more productive farms is often hindered. To analyze how distortions to factor reallocation affect farm dynamics and agricultural productivity, we develop a model of heterogeneous farms that make cropping choices and invest in productivity improvements. We calibrate the model using detailed farm-level panel data from Vietnam, exploiting regional differences in agricultural institutions and outcomes. We focus on south Vietnam and quantify the effect of higher measured distortions in the North on farm choices and agricultural productivity. We find that the higher distortions in north Vietnam reduce agricultural productivity by 41%, accounting for 61% of the observed 2.5-fold difference between regions. Moreover, two-thirds of the productivity loss is driven by farms' choice of lower productivity crops and reductions in productivity-enhancing investment, which more than doubles the productivity loss from static misallocation. |
| Keywords: | Farm dynamics, productivity, size, distortions, misallocation, Vietnam. |
| JEL: | O11 O14 O4 |
| Date: | 2024–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-775&r= |
| By: | Deng, Yaguo |
| Abstract: | In this chapter, we present a semiparametric Bayesian approach for stochastic frontier (SF) models that incorporates exogenous covariates into the inefficiency component by using a Dirichlet process model for conditional distributions. We highlight the advantages of our method by contrasting it with traditional SF models and parametric Bayesian SF models using two different applications in the agricultural sector. In the first application, the accounting data of 2, 500 dairy farms from five countries are analyzed. In the second case study, data from forty-three smallholder rice producers in the Tarlac region of the Philippines from 1990 to 1997 are analyzed. Our empirical results suggest that the semi-parametric Bayesian stochastic frontier model outperforms its counterparts in predictive efficiency, highlighting its robustness and utility in different agricultural contexts. |
| Keywords: | Bayesian semi-parametric inference; Efficiency; Heterogeneity; Production function; Stochastic frontier analysis |
| Date: | 2024–04–23 |
| URL: | http://d.repec.org/n?u=RePEc:cte:wsrepe:43837&r= |
| By: | Antonio Peyrache (School of Economics and Centre for Efficiency and Productivity Analysis (CEPA) at The University of Queensland, Australia) |
| Abstract: | This study tackles the problem of building nonparametric production technologies that satisfy homotheticity and (Hicks) neutrality. Since no current method is available, the paper proposes a method for constructing a homothetic metatechnology and proves that this metatechnology can be obtained as the union of homothetic group technologies that satisfy (Hicks) neutrality. It is shown that all these technologies are the minimal technologies that will satisfy the given set of axioms, therefore providing an axiomatic foundation for the method. There is a non-negligible computational aspect in the fact that all technologies are not only LP computable but are in fact computable as a linear function of the size of the dataset (in fact in the non-convex case enumeration algorithms can be used). An empirical illustration is provided to show the strength and range of applicability of the method. |
| Keywords: | Data Envelopment Analysis, Free Disposal Hull, Input Homotheticity, Hicks Neutrality, Efficiency |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uqcepa:194&r= |
| By: | Antonio Peyrache (School of Economics and Centre for Efficiency and Productivity Analysis (CEPA) at The University of Queensland, Australia) |
| Abstract: | I propose a computationally tractable and simple way of building a technology set that is homothetic and complete additevely separable. This results in a technology which is nonparametric in the graph and has an input isoquant of a constant elasticity of substitution (CES) functional form (not necessarily convex). The method introduced in this paper preserves good discrimination power when the number of inputs is large (thus addressing the curse of dimensionality), while preserving full flexibility in the graph of the technology and the form of scale economies. A numerical simulation is presented to show the drastic improvement in discrimination power compared to other methods. Two empirical illustrations are provided to show the usefulness of the approach. |
| Keywords: | Data Envelopment Analysis, Free Disposal Hull, Homotheticity, Additive Separability, Efficiency |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uqcepa:193&r= |
| By: | Boris Chafwehé; Andrea Colciago; Romanos Priftis |
| Abstract: | This paper proposes a New Keynesian multi-sector industry model incorporating firm heterogeneity, entry, and exit dynamics, while considering energy production from both fossil fuels and renewables. We examine the impacts of a sustained fossil fuel price hike on sectoral size, labor productivity, and inflation. Final good sectors are ex-ante heterogeneous in terms of energy intensity in production. For this reason, a higher relative price of fossil resources affects their profitability asymmetrically. Further, it entails a substitution effect that leads to a greener mix of resources in the production of energy. As production costs rise, less efficient firms leave the market, while new entrants must display higher idiosyncratic productivity. While this process enhances average labor productivity, it also results in a lasting decrease in the entry of new firms. A central bank with a strong anti-inflationary stance can circumvent the energy price increase and mitigate its inflationary effects by curbing rising production costs while promoting sectoral reallocation. While this entails a higher impact cost in terms of output and lower average productivity, it leads to a faster recovery in business dynamism in the medium-term. |
| Keywords: | Energy, productivity, firm entry and exit, monetary policy. |
| JEL: | E62 L16 O33 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:mib:wpaper:534&r= |