Is Input Mix Inefficiency Neglected in Agriculture? A Case Study of Pig‐based Farming Systems in England and Wales

The principal concern of this article is the relative importance of input mix as a source of inefficiency. Emphasis in efficiency analysis studies in agricultural production has historically focused on technical inefficiency as a single concept until methodological advances enabled it to be decomposed into pure technical inefficiency and scale inefficiency. But, this advance was insufficient to identify what we consider to be the major source of inefficiency in agricultural production, namely mix inefficiency. We consider that farm enterprises may be particularly susceptible to input mix inefficiency because of restrictions on movement around the frontier isoquant; delays in the adoption of improved technologies embodied in new vintages of production processes; risk as a source of friction in input allocation decisions; and the potential for inconsistency in simultaneously attempting to reach points of allocative efficiency and mix efficiency in input use. We use non‐parametric methods to calculate a Hicks–Moorsteen productivity index using panel data for a sample of specialised pig producers in England and Wales. This index is then decomposed into measures of technology, technical efficiency, scale efficiency and mix efficiency for an input orientation. Results of the analysis show that the estimated mean mix inefficiency (0.736) was substantially larger than mean technical inefficiency (0.975) and mean scale inefficiency (0.957) over the study period.     

A Cognitive Interpretation of Data Analysis

This paper proposes a scientific model to explain the analysis process. We argue that data analysis is primarily a procedure to build understanding, and as such, it dovetails with the cognitive processes of the human mind. Data analysis tasks closely resemble the cognitive process known as sensemaking. We demonstrate how data analysis is a sensemaking task adapted to use quantitative data. This identification highlights a universal structure within data analysis activities and provides a foundation for a theory of data analysis. The competing tensions of cognitive compatibility and scientific rigour create a series of problems that characterise the data analysis process. These problems form a useful organising model for the data analysis task while allowing methods to remain flexible and situation dependent. The insights of this model are especially helpful for consultants, applied statisticians and teachers of data analysis.     

Over oprichting en bestuur van trusts

Hoewel in den regel door ons geen vertaalde stukken worden geplaatst, hebben wij gemeend voor de hier volgende verhandeling van Prof. Hadley, oorspronkelijk in Scribner's Magazine voorkomende, eene uitzondering te mogen maken, aangezien daarin, door een bekwaam schrijver die midden in de beweging leeft, een onderwerp van groot actueel belang wordt behandeld. An het slot (bladz. 115) heeft de vertaler eenige opmerkingen van zijn eigen hand toegevoegd.De Redactie.     

Dynasties versus pennant races: competitive balance in major league baseball

This paper examines the impact of competitive balance on attendance in Major League Baseball. Two types of competitive balance are included in a single‐equation model of attendance: intra‐seasonal balance and inter‐seasonal balance. The metric used to calibrate the first is the ratio of the actual standard deviation of season win percents divided by the ideal standard deviation. Inter‐seasonal balance is calibrated with Markov transitional probabilities of teams making the playoffs in consecutive seasons. The results indicate that intra‐seasonal balance does not significantly impact attendance, and that inter‐seasonal balance has significant but small impacts on attendance in the American League. Copyright © 2006 John Wiley & Sons, Ltd.     

An Extended Analytical Approach to Credit Risk Management

Among the 'reduced form models' for measuring the credit risk of a bank's portfolio is CreditRisk+, which provides a closed–form solution for calculating the portfolio loss distribution based on an actuarial approach. The limitations of this model are well known, but they are often misinterpreted as being deeply embedded within the model. Dismantling the mathematical components of the model allows one to modify and extend it in several ways while remaining within an analytical approach. One of the most unattractive features is the orthogonality of the background factors or sectors as it hinders any resemblance to real–world macroeconomic indexes or industrial sectors and geographical areas. Among other extensions, which we mention briefly, we present in more detail how the original model can be amended to consider correlations among default risk sectors and among severity risk segments. These extensions are applied to real–life data, based on mortality rate data produced by the Italian Central Bank.
(J.E.L.: C00, C51).     

Equity and arbitration in major league baseball

Equity theory argues that workers examine their job performance and salaries relative to workers in comparable situations. If compensation is inequitable, workers may adjust their behavior. We test the hypothesis that an arbitration‐eligible player in Major League Baseball is more likely to file for arbitration and/or proceed to an arbitration hearing if he feels he is underpaid relative to his comparison other. Bivariate probit is used to increase efficiency and correct for the sample bias in estimating decision models within the two‐step arbitration process. The results indicate that equity is a significant predictor of a player's unilateral decision to file but is an insignificant determinant of going to a hearing because of offsetting responses to equity by player and owner. Copyright © 2002 John Wiley & Sons, Ltd.     

Estimating the range of economic impacts on farms of nutrient leaching reduction policies

Declining agricultural incomes, increasing concern over rural poverty and sporadic crises such as those of Bovine Spongiform Encephalopathy (BSE) and Foot and Mouth Disease mean that the imposition of further costs on U.K. agriculture are likely to be politically and socially sensitive. Such additional costs are however on the agenda with the implementation of the Water Framework Directive (WFD; European Commission, 2000 ). The WFD aims to achieve “good ecological status” in EU water bodies reducing, inter alia, diffuse pollution from agriculture. In this study, we assess four possible WFD measures proposed to the U.K. Department for Environment, Food, and Rural Affairs: reducing inorganic fertilizer application, conversion of arable land to ungrazed grassland, reducing livestock stocking rates, and reducing livestock dietary N and P intakes. For each measure, changes in farm gross margins (FGMs) are estimated using a dataset of over 2000 farms. In contrast to previous analyses, which have focussed upon mean responses on stylized farms, our approach allows the analysis of the range of impacts across a wide variety of real‐world farms and farm types. Findings reveal high variability in impacts. Cost‐effectiveness analysis indicates that, on average, cropping farms seem capable of reducing nutrient leaching in a more cost‐efficient way than livestock or dairy enterprises.     

Patterns in Technical Efficiency and Technical Change at the Farm‐level in England and Wales, 1982–2002

English and Welsh farm‐level survey data are employed to estimate stochastic frontier production functions for eight different farm types (cereal, dairy, sheep, beef, poultry, pigs, general cropping and mixed) for the period 1982 to 2002. Differences in the relative efficiency of farms are explored by the simultaneous estimation of a model of technical inefficiency effects. The analysis shows that, generally, farms of all types are relatively efficient with a large proportion of farms operating close to the production frontier. However, whilst the frontier farms of all types are becoming more efficient through time because of technical change, it is also the case that the efficiency of the average farm for most farm types is increasing at a slower rate. In addition, annual mean levels of efficiency for most farm types have declined between 1982 and 2002. The factors that consistently appear to have a statistically significant effect on differences in efficiency between farms are: farm or herd size, farm debt ratios, farmer age, levels of specialisation and ownership status.