Product differentiation,monopolistic competition and city size

Traditionally, the formation of cities has been explained by such supply-side phenomena as scale economies in production or such demand-side phenomena as public goods. This paper presents an integrated demand and supply approach to the formation of cities in spatial economy. Demand considerations, in the form of consumer agglomeration economies (i.e., product variety), are presented as a major cause of urban agglomeration. On the supply side, scale economies are introduced. Both aspects are examined by using the Dixit-Stiglitz model of monopolistic competition to characterize the equilibrium and optimum city size. We also discuss a subsidy scheme that produces an equilibrium city size corresponding to a first-best optimum. Then we analyze the distribution of population in a system of two cities.     

Externalities, Indivisibility, Nonreplicability, and Agglomeration

In this paper we argue that the impact of external scale economies and diseconomies on city size is not nearly as clear-cut as it is tacitly believed in urban economics. Similarly, city-size distortions are not caused by externalities alone. Indivisibility and nonreplicability, which prevent establishing the “right” number of cities, may represent a source for city-size distortions which can be stronger than the standard resource misallocation resulting from external scale economies and diseconomies. It follows that a direct population dispersion policy is not just an inferior substitute to Pigouvian taxes and subsidies but rather a useful complement.     

武汉城市圈中小企业如何实现规模经济

实现规模经济是武汉城市圈中小企业不断发展壮大的一条重要途经。武汉城市圈内各级政府和中小企业要根据企业的发展状况与基本特征,努力跨越实现规模经济的主要障碍,充分利用武汉城市圈作为"两型社会"试验区的发展机遇,既要实现内在的规模经济,也要实现外在的规模经济。     

Efficiency, productivity, and scale economies in the U.S. property-liability insurance industry

The paper examines efficiency, productivity and scale economies in the U.S. property-liability insurance industry. Productivity change is analyzed using Malmquist indices, and efficiency is estimated using data envelopment analysis. The results indicate that the majority of firms below median size in the industry are operating with increasing returns to scale, and the majority of firms above median size are operating with decreasing returns to scale. However, a significant number of firms in each size decile have achieved constant returns to scale. Over the sample period, the industry experienced significant gains in total factor productivity, and there is an upward trend in scale and allocative efficiency. More diversified firms and insurance groups were more likely to achieve efficiency and productivity gains. Higher technology investment is positively related to efficiency and productivity improvements.     

Efficiency in Third Sector Partnerships for Delivering Local Government Services: The role of economies of scale,scope and learning

Abstract

Third sector partnerships are under pressure to change in the light of the increasing cost pressures on local public services. The literature throws doubt on the level of economies of scale and suggests that more attention should be given to economies of scope and learning. The common conflation of economies of size with economies of scale has led policymakers to overemphasize larger scale providers and has distorted the strategies which third sector organizations have adopted, pushing them towards mergers and consortia based on scale.     

中国城市聚集经济实证分析:以天津市为例

聚集经济在城市经济及区域经济研究中占核心地位,它直接体现城市及区域空间结构的经济效率以及竞争力.本研究利用卡利诺模型来对1987年至2001年期间天津市聚集经济进行实证检验.其分析结果表明:在1990年至1994年间天津市呈现出正的聚集经济效应;在1996年至2001年期间呈现出负的聚集经济效应,就是聚集不经济;最近五年聚集经济呈现出上升趋势,相当靠近于1,2001年的聚集经济系数为0.984.本研究的分析结果表明,以工业为主的天津市城市经济效应并不明显,但是,最近天津市工业的总体效应是较良好的,即将能够创造出一些空间外部经济效应.     

An Equilibrium Model Endogenizing the Emergence of a Dual Structure between the Urban and Rural Sectors

This paper presents a general equilibrium model which formalizes the trade-off between economies of specialization and transaction costs. The comparative statics, based on corner solutions, indicate that the general equilibrium will shift between several market structures as transaction efficiency is improved. Introducing a differential in transaction efficiency between the agricultural and manufacturing sectors, we derive the emergence of a city from the evolution of the division of labor, which is driven by improvements in transaction efficiency. The division of labor is necessary but not sufficient for the emergence of cities. A sufficiently high transaction efficiency will make a city emerge from a high level of division of labor between specialized manufacturers.     

AGGLOMERATION ECONOMIES IN JAPAN: TECHNICAL EFFICIENCY, GROWTH AND UNEMPLOYMENT

This paper examines if the effects of agglomeration economies are manifested in technical efficiency and generate faster economic growth and higher (lower) levels of employment (unemployment). Using the prefecture level data for each of the two-digit groups of industries in Japan, it estimates a region-specific technical efficiency index based on the stochastic frontier production function framework. The factor analysis shows that in most of the industry-groups, efficiency has a positive association with external scale variable(s). Though the relationship is not very strong, it would be erroneous to ignore the effect of agglomeration economies on efficiency. For some light goods industries, the agglomeration effect is relatively stronger. Economic growth varies positively with external scale variable(s) and the unemployment rate tends to fall with respect to growth and concentration. This suggests that measures against industrial concentration may be counter-productive, particularly in the context of globalization when countries greatly need to raise productivity.     

The effect of reimbursement of worker's transport costs: The case of urban areas in Japan

In some economies, workers are compensated for their commuting costs to the workplace. The spatial structure of an urban area is analyzed comparing a transport cost compensated system to one where expenses are borne by workers. Profit maximizing behavior by firms results in lower wages being paid in the city where transport costs are compensated. It is shown that worker renters achieve a higher level of utility in the area where transport costs are not compensated. Numerical examples are constructed using a range of parameter values which yields measures of the increase in spatial size of the city where transport costs are compensated. The loss in welfare is also evaluated.     

Technical efficiency of Norwegian banks: The non-parametric approach to efficiency measurement

The nonparametric frontier methodology is applied to a sample of banks, where output levels are measured either by the number of accounts and their average size, or by the total balances of the accounts. The efficiency rankings of individual banks are found to depend substantially on our choice of output metric, whereas the estimated size of potential productivity improvements in the banking sector are less affected. The results on economies of scale are also largely unchanged.The refereeing process of this paper was handled through S. Grosskopf.     

Scale Economies and Efficiency in U.S. Agriculture: Are Traditional Farms History?

The structural transformation of agriculture in recent decades has raised serious concerns about the future of the family farm. This study examines the economic performance of U.S. farms, to explore the potential of smaller farms to compete with larger entities, and ultimately to survive in this rapidly changing environment. We use deterministic and stochastic frontier methods and survey data to measure and evaluate factors underlying scale economies (SEC) and efficiency (SEF) of corn-belt farms for 1996–2001. Our results suggest that family farms are both scale and technically inefficient. Potential for the exploitation of significant scale and scope economies, and some greater technical efficiency, seem to be driving trends toward increased farm size and dwindling competitiveness of the small family farm.     

基于数据包络方法的2010年会计师事务所经营效率分析

本文运用数据包络分析方法中基于输入的CCR模型和BCC模型,对2010年会计师事务所的主要投入产出数据进行效率分析,从整体上分析目前我国会计师事务所的运营效率。通过研究发现,一部分会计师事务所已经达到规模效益,但是还有很多会计师事务所在技术和规模上都没有达到理想的水平,在经营效率上还需要很大的改进。     

Technical efficiency,specialization and ownership form: evidences from a pooling of Italian hospitals

We evaluate how the productive structure and level of specialization of a hospital affect technical efficiency by analyzing a six-year panel database (2000/2005) drawn from hospital discharge records and Ministry of Health data. We adopt a distance function approach, while measuring the technical efficiency level with stochastic frontier techniques. After controlling for environmental variables and hospital case-mix, inefficiency is negatively associated with specialization and positively associated with capitalization. Capitalization is typical of private structures which, on average, use resources less efficiently with respect to public and not-for-profit hospitals. Finally, by looking at scale elasticities, we find some evidence of unexploited economies of scale, leaving room for centralization.     

Economies of diversification in the US credit union sector

Significant scale economies have been recently cited to rationalize a dramatic growth in the US retail credit union sector over the past few decades. In this paper, we explore another plausible supply‐side explanation for the growth of the industry, namely economies of diversification. We focus on the fact that credit unions differ among themselves in the range of financial services they offer to their members. Since larger credit unions tend to offer a more diversified financial service menu than credit unions of a smaller size, the incentive to grow in size may be fueled not only by present scale economies but also by economies of diversification. This paper provides the first robust estimates of such economies of diversification for the credit union sector. We estimate a flexible semiparametric smooth coefficient quantile panel data model with correlated effects that is capable of accommodating a four‐way heterogeneity among credit unions. Our results indicate the presence of non‐negligible economies of diversification in the industry. We find that as many as 27–91% (depending on the type and the cost quantile) of diversified credit unions enjoy substantial economies of diversification; the cost of most remaining credit unions is invariant to the scope of services. We also find overwhelming evidence of increasing returns to scale in the industry.     

Parametric Decomposition of a Generalized Malmquist Productivity Index

This paper provides a parametric decomposition of a generalized Malmquist productivity index which takes into account scale economies. Unlike Balk (2001), the contribution of scale economies to productivity change is evaluated without recourse to scale efficiency measures, which are neither bounded for globally increasing, decreasing, or constant returns to scale technologies nor for ray-homogeneous technologies. An empirical application using panel data from Spanish savings banks is included. This application shows the advantages of the suggested method compared to Balk's approach. The results show an increase of total factor productivity which can be mainly attributed to technical progress and the positive effect of returns to scale.     

房地产企业多产品结构的经济效益分析

近年来，各地房地产企业发展迅速，实行多元化战略，呈现了多产品结构。本文运用Translog成本函数估算分析了多产品结构的经济效益，提出了“大公司、大企业有最大的范围经济，但其规模经济稳定不变，不能获得较大的成本效益；中等规模的公司可获得较大的规模经济和范围经济，能获得较好的成本效益”的观点。     

Theory of city system structure

In this paper, a model of city systems is presented which is then used to discuss the normative problem of finding the optimum number of cities accomodating a given national population. The problem is related to that of determining, in the presence of scale economies, the optimum number of firms producing a given industry output at least cost. Therefore, recent findings of the literature on industrial organization can be adopted to our model of city systems. It is shown in which sense commonly observed deficits of local governments can be taken aspointing towards an excessive number of existing communities.     

The Henry George Theorem in a second-best world

The Henry George Theorem (HGT) states that, in first-best economies, the fiscal surplus of a city government that finances the Pigouvian subsidies for agglomeration externalities and the costs of local public goods by a 100% tax on land is zero at optimal city sizes. We extend the HGT to distorted economies where product differentiation and increasing returns are the sources of agglomeration economies and city governments levy property taxes. Without relying on specific functional forms, we derive a second-best HGT that relates the fiscal surplus to the excess burden expressed as an extended Harberger formula.     

Sewer plant operating efficiency,patronage, and competition

Sewer treatment plants in New York State, US, are studied for efficiency and economies of scale. Substantial economies of scale are found. The degree of inefficiency for each plant is then computed and this inefficiency is related to the degree of market concentration in that county. The result found is that greater concentration induces a reduction in efficiency. This is argued to be consistent with the Tiebout Hypothesis. Copyright © 2004 John Wiley & Sons, Ltd.     

Efficiency in the provision of university teaching and research: An empirical analysis of UK universities

A flexible three-output, two-input cost function model is used to examine the cost efficiency of UK universities as producers of teaching and research ‘outputs’. Unlike previous studies, a comprehensive peer review of research quality is incorporated. Overall, product-specific and input-specific economies of scale, global and product-specific economies of scope, marginal costs and cost complementarities are estimated. Overall and product-specific scale results indicate considerable increasing returns, while the scope results generally suggest neither economies nor diseconomies. Sensitivity analysis is used to simulate the impact of current government policy, regarding the expansion of undergraduate teaching output, on these results.