Shadow directional distance functions with bads: GMM estimation of optimal directions and efficiencies

Because of its greater flexibility, the directional distance function (DDF) has been employed with increasing frequency to estimate multiple-input and multiple-output production, where inputs and outputs can be good or bad. However, typically researchers make three restrictive assumptions. First, they assume a direction of movement of firm production toward the frontier. Second, they assume that actual quantities of inputs and outputs are allocatively or price efficient. Third, they assume exogeneity of all inputs and all outputs, except for the normalized one. The first contribution of this paper is to include parameters to estimate optimal directions which correspond to the firm’s profit-maximizing (PM) position. The second contribution is to generalize the DDF to a shadow-quantity DDF. This entails adding distortion parameters to each input and output quantity of the DDF, creating shadow quantities. To estimate the shadow quantities and the structural parameters, we form the shadow DDF system, which includes the shadow DDF and all the first-order price equations from the shadow-PM problem. These include prices for bad inputs and bad outputs, where we approximate their missing prices for use in their first-order price equations. The third contribution is that we estimate the shadow DDF system using a Generalized Method of Moments approach, where all variables are potentially endogenous. This approach is simpler than the Bayesian one employed in Atkinson et al. (Estimating efficient production with bad inputs and outputs using latent prices and optimal directions. Working paper, University of Georgia, Athens, 2016), which estimated shadow prices and optimal directions. Using the same data set, both sets of results are qualitatively very similar, although they differ somewhat quantitatively.     

Slack-based directional distance function in the presence of bad outputs: theory and application to Vietnamese banking

In this paper we extend the slack-based directional distance function introduced by Färe and Grosskopf (Eur J Oper Res 200(1):320–322, 2010) to measure efficiency in the presence of bad outputs and illustrate it through an application on data of Vietnamese commercial banks. We also compare results from the slack-based directional distance function relative to the directional distance function, the enhanced hyperbolic efficiency measure (Färe et al. in Rev Econ Stat 71(1):90–98, 1989) and the Farrell-type technical efficiency and confirm that it has greater discriminative power.     

Empirical comparison of the shape of welfare functions

This study compares the fit of the lognormal welfare function proposed by Van Praag (1968) with the fit of 12 other functions. The comparison uses a sample of about 14;000 respondents. The lognormal function outperforms 11 alternatives in terms of the residual variance criterion, while the logarithm performs slightly better.     

Measuring technical efficiency and shadow price of water pollutants for the leather industry in India: a directional distance function approach

Journal of Regulatory Economics - This paper measures the cost of reducing pollution from the Kanpur leather industry which is a prime source of pollution in India’s largest river basin of...     

The direction of developing country trade: Empirical evidence of differences between South-South and South-North trade

Declining market opportunities in Northern markets led to views that greater South-South trading might provide an alternative growth stimulus. This paper analyses the characteristics of South-South trade in manufactures and recent changes in the level of such trade to help clarify the potential of greater self-reliance within the South. South-South trade is found to be more intensive in the use of both physical and human capital, hence less rational from the static comparative advantage viewpoint than South-North trade. There is indirect but strong evidence that exporting countries with greatest orientation towards the South are those with greater distortions, less rapid movements up the ladder of comparative advantage, and weaker export performance. Finally, it is observed that the recent boom in South-South trade is largely explained by simple market size effects: very rapid growth of rich oil-exporters and the faster GNP growth of developing compared to developed countries. The paper concludes that while South-South trade of about the present magnitude-one of greater developing country exports - is certainly rational, there is little evidence to support views that greater South-South trade should be especially promoted. Arguments of dynamic comparative advantage may favor South-South trade, but so far these have been more speculative and not yet well researched empirically.     

Using the Delphi method to assess community health needs

Comprehensive health planning must ultimately be based upon information about the people to be served. Their needs as potential patients or clients of the various service systems being planned must be identified and evaluated. Regional cooperation on meeting these health care needs is premised on some agreement amongst the population as to the existing problems and their relative priorities. In order to investigate how such a health needs assessment might be undertaken a study was conducted using a panel of citizens selected from a 10-country central Texas region. The results demonstrate the fesibility of employing the Delphi method for achieving consensus on some health care issues; the information obtained can become valuable input to the overall health planning process.     

Empirical implications of mathematical functions used to analyze market penetration of new products—Cigarettes case study

Three types of S-shaped growth curves—the logistic, the lognormal, and the Gompertz—are widespread in the literature on analysis of market penetration of new products/processes. This article discusses the mathematical properties of these function in the light of their empirical implications, such as location of the point of maximum growth rate, the symmetry/asymmetry of the growth rates around that inflection point, and the ease of estimation (linear and nonlinear regressions). The empirical economic expectations cannot specify these phenomena a priori so that a less restrictive function should be preferred. Such a function is the Gompertz function. It is, therefore, applied to the study of market penetration of filtered and menthol cigarettes and shown that the empirical verification vindicates the theoretical postulates of that function. The empirical estimates are also closer to actual estimates of growth rates of adoption.     

Differentiability of the cost functions is equivalent to strict quasiconcavity of the production functions

The assumption that cost functions are differentiable with respect to input prices is equivalent to the assumption that production functions are strictly quasiconcave.     

Using the directional shadow elasticity of substitution to measure the concavity of the cost function

The note develops a test of the concavity of a cost function using the directional shadow elasticity of substitution. The DSES generalizes the shadow elasticity of substitution to arbitrary price changes in the plane tangent to the factor price frontier. The test computes the minimum value of the DSES, which should be non-negative for concavity, and the direction in the price space along which it occurs.     

Using the concept of yield to assess the sustainability of different tourist types

Sustainability assessments have become important tools for decision makers. This research assesses the sustainability of different types of tourists in New Zealand by using the concept of yield and by developing yield indicators in the areas of financial, public sector and sustainable yield. The concept and indicators have been developed in cooperation with the New Zealand tourism sector and therefore provide a sector-driven approach to implement a sustainability assessment. The analysis shows that there are numerous ‘trade-offs’ between indicators when attempting to define the ‘ideal visitor type’. Coach tourists, for example, are the largest spenders and generate the greatest Value Added in tourism on a per-day basis, but they contribute less to the financial sustainability of tourism when the costs of capital are accounted for. Coach tourists are highly concentrated in a few key destinations and at the same time produce substantial amounts of CO₂ emissions due to their air travel component. In contrast, backpacker and camping tourists provide greater financial yield and are more dispersed, but they are also the greatest user of publicly provided tourist attractions and therefore come at a higher cost to government than other tourist types. Camping tourists are also contributing considerably to CO₂ emissions. The yield analysis proposed in this paper could be a valuable tool for complex policy decision making and identifying strategies that lead to high-yield tourism.     

Using the multi-level perspective on socio-technical transitions to assess innovation policy

In recent years a growing literature on socio-technical transitions towards sustainability has emerged. Scholars have explored ways through which configurations of technologies, infrastructures, social practices, institutions and markets can change to fulfil their functions in a more sustainable way. A multi-level perspective (MLP) has been developed to describe and analyse these complex, long-term processes. It has also been used to help design policy for example in the Netherlands. In this paper the MLP is used in a novel way: as a heuristic to ex ante assess policies to stimulate socio-technical transitions. Instead of using it for policy development, the MLP is used here for an assessment of policy. The analysis focuses on a particular policy initiative intended to stimulate the transition to a low carbon economy in the UK: the Carbon Trust. This paper makes two contributions to the socio-technical transitions literature: Conceptually, the paper demonstrates the usefulness of the socio-technical multi-level perspective to analyse policies and assess their likely impact ex ante against the background of theorising about the patterns of large scale, socio-technical change. Empirically, the paper finds that the activities of the Carbon Trust consist of a variety of well targeted ways to stimulate the development of socio-technical niches as well as to change regime practices directly. Nevertheless, the paper argues that this model also faces difficulties in promoting a transition towards a low carbon economy.     

Linearity of the return to education and self selection

This paper investigates the earnings-education profile in Spain. First no functional form is imposed on this relation but instead dummy variables are used for each year of education. Second, different alternatives are analysed until the best parametric form is found. Moreover problems related to the self selection of individuals and to the segmentation of the labour market based on the educational level are considered. The main results indicate that the effect of education on earnings is not significant until individuals finish secondary education and from there onwards the relationship can be considered linear.     

Retrospective database study to assess the economic impact of hip fracture in the United Kingdom

Objective:

Publications containing recent, real-world data on the economic impact of hip fractures in the UK are lacking. This retrospective electronic medical records database analysis assessed medication and healthcare resource use, direct healthcare costs, and factors predicting increased resource use and costs in adult UK hip fracture patients.

Methods:

Data were obtained from the Clinical Practice Research Datalink linked to the Hospital Episode Statistics for adult patients hospitalized for their first hip fracture between January 1, 2006 and March 31, 2011 (index event); healthcare costs were calculated from the National Health Service perspective using 2011–2012 cost data.

Results:

Data from 8028 patients were analyzed. Resource use and costs were statistically significantly higher in the year following fracture (mean total [standard deviation (SD)] cost £7359 [£14,937]) compared with the year before fracture (mean total [SD] cost £3122 [£9435]; p?Conclusions:

Although we did not capture all pre- and post-index costs and healthcare utilization, this study provides important insights regarding the characteristics of patients with hip fracture, and information that will be useful in burden-of-illness and economic analyses.     

Resampling and bootstrap algorithms to assess the relevance of variables: applications to cross section entrepreneurship data

Empirical Economics - In this paper, we propose an algorithmic approach based on resampling and bootstrap techniques to measure the importance of a variable, or a set of variables, in econometric...     

Using pre-EMU money market rates to assess monetary policy in the euro area

This note addresses the problems arising when using national pre-EMU interest rate data in the estimation of monetary policy reaction functions for the euro area. We provide evidence that failing to adjust for interest rate risk premia leads to an overestimation of the response of monetary policy both to inflationary pressures and to the output gap. A method for adjusting pre-EMU interest rate data for risk premia is proposed.     

优化成本管理的方向

<正> 投资银行和其他经济领域一样,在其发展初期往往以积极扩张的战略为主,抢占市场份额、形成垄断优势是该时期的主要目的。高额的垄断利润抵消了庞大的费用支出对公司财务状况的影响。但是,随着行业发展逐步走向成熟,其他公司的进入逐步削弱了传统领域的垄断优势,钱变得越来越难赚,巨额费用支出则显得更具有刚性。要想在激烈竞争中保持利润的相对稳定,将公司成本控制在一个相对合理的水平上就成为公司发展的首要原则。国际投资银行近百年的发展历史向我们展示了公司管理重心从收人扩张到成本控制的变化过程。我国证券公司虽然从产生至今仅有十几年的历史,但就其发展过程     

Growth, distance to frontier and composition of human capital

We examine the contribution of human capital to economy-wide technological improvements through the two channels of innovation and imitation. We develop a theoretical model showing that skilled labor has a higher growth-enhancing effect closer to the technological frontier under the reasonable assumption that innovation is a relatively more skill-intensive activity than imitation. Also, we provide evidence in favor of this prediction using a panel dataset covering 19 OECD countries between 1960 and 2000 and explain why previous empirical research had found no positive relationship between initial schooling level and subsequent growth in rich countries.