Profit maximization and supermodular technology

A dataset is a list of observed factor inputs and prices for a technology; profits and production levels are unobserved. We obtain necessary and sufficient conditions for a dataset to be consistent with profit maximization under a monotone and concave revenue based on the notion of cyclic monotonicity. Our result implies that monotonicity and concavity cannot be tested, and that one cannot decide if a firm is competitive based on factor demands. We also introduce a condition, cyclic supermodularity, which is both necessary and sufficient for data to be consistent with a supermodular technology. Cyclic supermodularity provides a test for complementarity of production factors. We are very grateful to two anonymous referees for suggestions, comments, and corrections. We also thank Kim Border for his suggestions on an earlier draft.     

The evolution of male-female earnings differentials in Canadian universities,1970–2001

Abstract .  The evolution of academic salaries and the gender earnings gap in Canadian universities is analysed using a unique Statistics Canada data set containing detailed information on all full-time teachers at Canadian universities over the period 1970 through 2001. Male salaries declined across cohorts, while female salaries remained stable; consequently, male-female earnings differentials have narrowed. Recent years have also seen increasing variation in academic salaries for both men and women. A gender earnings gap remains, the bulk of which can be explained by differences in men's and women's rank and field. The unexplained earnings gap has decreased over time.     

Culture and National Conditions Facilitating Entrepreneurial Start-ups

Culture shapes institutional practices and policies facilitating or constraining the formation of new start-ups. This study assesses the extent to which cultural parameters and economic conditions support the development of new business start-ups in 44 nations. Cultural and economic variables provided unique contributions in predicting a profile of environmental conditions (ease of obtaining financing for new ventures, administrative burdens, legal infrastructure, and labor flexibility) favoring entrepreneurship in different nations.     

Multiples of Six: The Six Companies and West Coast Industrialization, 1930-1945

In this article I explore the protean organizational forms usedby the Kaiser and Bechtel construction companies between 1930and 1950. Kaiser and Bechtel prospered during the Depressionand World War II because, as members of the Six Companies consortiumof construction firms, they refused to adopt a "best practice"model of corporate organization drawn from the diversified manufacturingand distribution sectors. Instead, Kaiser and Bechtel used avariety of organizational forms to win numerous government contractsfor public works and defense production, transforming themselvesfrom small regional firms into substantial national and globalcorporations. I contribute to modern academic debate over thehistorical forms of business enterprise and the conjunctionof state consumption and private production.     

State-conditional Fertilizer Yield Response on Western Kenyan Farms

Fertilizer interventions have attained prominence in rural poverty reduction programs in Africa. Using data from maize plots operated by small farmers in western Kenya, we find a von Liebig-type relationship between soil organic matter (SOM) and maize yield response to nitrogen application. Low SOM commonly limits the yield response to mineral fertilizer application. Although fertilizer is, on average, profitable in our sample, on roughly one-third of the plots degraded soils limit the marginal productivity of fertilizer such that it becomes unprofitable at prevailing prices. Moreover, because poorer farmers most commonly cultivate soils deficient in SOM, fertilizer interventions might be less pro-poor than is widely assumed and may instead reinforce  ex ante  income inequality.     

SUPPLY RESPONSE WITH STOCHASTIC TECHNOLOGY AND PRICES IN AUSTRALIA'S RURAL EXPORT INDUSTRIES

Risky output prices and production characterise Australian agriculture. Exports are vitally important, sometimes relying heavily on a particular market. In this study a model is developed to include explicitly both output price and technological risks as well as multiple output relationships. It is used to show that changes in US beef import policy generating a 10 per cent beef price fall could reduce Australian beef supply by 3.5 per cent and grazing industry net revenue by 8.4 per cent, despite some switching from beef production to other enterprises.     

Diversification, Vertical Integration, and the Regional Pattern of Dairy Farm Size

Dairy farm size differs considerably across the United States. We analyze patterns of dairy farm size to determine how differences in vertical integration and diversification relate to farm size. We find that diversification accounts for little size variation. For vertical integration, the partial correlation with dairy herd size is strongly negative. Dairy value-added size measures vary less across regions than herd size, indicating that an important part of herd size variation relates to vertical integration. Nonetheless, dairy farms in the Pacific and South regions remain much larger than farms in the traditional dairy regions, even when accounting for vertical integration.