explaining agricultural productivity growth an international perspective this article presents multi output multi input total factor productivity tfp growth rates in agriculture for 88 countries over the 1970 2001 period estimated with both stochastic frontier analysis sfa and the more commonly employed data envelopment analysis dea we find results with sfa to be more plausible than with dea and use them to analyze trends across countries and the determinants of tfp growth in developing countries the central finding is that policy and institutional variables including public agricultural expenditure and proagricultural price policy reforms are significant correlates of tfp growth the most significant geographic correlate of tfp growth is distance to the nearest oecd country

input promotion within a complex subsector fertilizer in nigeria despite growing evidence that fertilizers can substantially increase yields and slow down environmental degradation in sub saharan africa ssa the region still lags far behind other developing areas in fertilizer use low use rates persist despite numerous efforts to ease farmers access to quality and affordable fertilizer this article reviews the effects of nigeria s fertilizer policies including fertilizer subsidies on fertilizer use we also compare the old government led fertilizer subsidy scheme with the more recent voucher based programs and their potential effects on private fertilizer sector development based on our analysis of nigeria s experience with fertilizer subsidies we identify the potential major challenges to be faced by the new fertilizer subsidy scheme currently being implemented nationwide

interest rate expectations and interest parity abstract this paper examines an hypothesis for explaining divergences from interest parity that is based on interest rate expectations if interest rates are expected to rise significantly within the arbitrage oppurtunity implies riskless profit waiting in ths way has been noted in the historical literature seems to make sense theoritically if portfolio adjusment cost in the capital market outweigh any costs of being out of long term equilibrium and explains a significant portion of us uk interest parity divergences using onshore assets in a recent floating preiod

the internal market and hospital efficiency a stochastic distance function approach the uk internal market was one of the first european attempts to introduce a competitive mechanism in the provision of hospital services the assumption was that competition would have led hospitals to increase efficiency in the use of their resources the aim of this paper is to analyse the effectiveness of this kind of reform by measuring the changes in technical efficiency of a panel of 52 acute scottish hospitals observed from 1991 92 to 1996 97 the time period covers the whole duration of the internal market and the sample contains a different mix of both trusts and non trusts where the former embed the proper working of the reform the selected model is a stochastic output distance function that includes an interaction dummy variable to allow for parameters to change over time the results show a structural break after which hospitals change not only the way in which they provide their services but also the kind of services they provide favouring the quicker treatment of patients on a day basis

do r d tax credits work evidence from a panel of countries 1979 1997 this paper examines the impact of fiscal incentives on the level of r d investment an econometric model of r d investment is estimated using a new panel of data on tax changes and r d spending in nine oecd countries over a 19 year period 1979 1997 we find evidence that tax incentives are effective in increasing r d intensity this is true even after allowing for permanent country specific characteristics world macro shocks and other policy influences we estimate that a 10 fall in the cost of r d stimulates just over a 1 rise in the level of r d in the short run and just under a 10 rise in r d in the long run

estimating griliches k shifts griliches k shift a crucial parameter in the welfare evaluation of technological change is shown to be equal to the radial rate of technological change plus a vector of commodity bias parameters obtained from the distance function the analysis permits decomposition of sectoral productivity growth into productivity growth by commodity the k shifts estimated for wheat corn soybeans and beef in u s agriculture indicate a decrease in the marginal cost of production of corn soybeans and wheat during the 1950 1993 years

test of the adjustment process and linear homogeneity in a stock adjustment model of money demand stock adjustment models of money demand have employed either the nominal or real adjustment process but they have not been tested statistically due to their nonnestedness this paper formulates a general stock adjustment model which includes both nominal and real adjustment processes as its nested subsets each process is then tested against the general specification the paper also examines the homogeneity of money demand with respect to price level and income in the general model

competition and corporate performance are people right to think that competition improves corporate performance my investigations indicate first that there are some theoretical reasons for believing this hypothesis to be correct but they are not overwhelming furthermore the existing empirical evidence on this question is weak however the results reported here based on an analysis of around 670 u k companies do provide some support for this view most important i present evidence that competition as measured by increased numbers of competitors or by lower levels of rents is associated with a significantly higher rate of total factor productivity growth

estimating the cost of improving quality in electricity distribution a parametric distance function approach abstract the quality of electricity distribution is being more and more scrutinized by regulatory authorities with explicit reward and penalty schemes based on quality targets having been introduced in many countries it is then of prime importance to know the cost of improving the quality for a distribution system operator in this paper we focus on one dimension of quality the continuity of supply and we estimated the cost of preventing power outages for that we make use of the parametric distance function approach assuming that outages enter in the firm production set as an input an imperfect substitute for maintenance activities and capital investment this allows us to identify the sources of technical inefficiency and the underlying trade off faced by operators between quality and other inputs and costs for this purpose we use panel data on 92 electricity distribution units operated by erdf electricite de france reseau distribution in the 2003 2005 financial years assuming a multi output multi input translog technology we estimate that the cost of preventing one interruption is equal to 10 7 for an average dso furthermore as one would expect marginal quality improvements tend to be more expensive as quality itself improves

market share market value and innovation in a panel of british manufacturing firms this paper examines the empirical relationship between technological innovations market share and stock market value new developments in the estimation of dynamic count data models are used to control for unobserved firm specific heterogeneity we find a robust and positive effect of market share on observable headcounts of innovations and patents although increased product market competition in the industry tends to stimulate innovative activity furthermore the impact of innovation on market value is larger for firms with higher market shares we argue that our results are consistent with models where high market share firms have incentives to pre emptively innovate

price competition and market structure the impact of cartel policy on concentration in the uk this paper examines the impact of firms conduct on market structure it studies the evolution of concentration in uk manufacturing following the abolition of cartels using a theoretical framework based on sutton s theory of market structure and a panel data set of four digit industries over 1958 1977 the econometric results suggest that the intensity of price competition has a positive impact on concentration in exogenous sunk cost industries as well as in advertising intensive and r d intensive industries the concentration market size relationship while negative in exogenous sunk cost industries breaks down in industries with high advertising or r d intensity

the impact of agricultural research in africa aggregate and case study evidence abstract this paper presents case study results and aggregate data to evaluate the impact of research in african agriculture of 32 case studies all but eight report annual returns over 20 and many are far higher with most gains arising in the late 1980s and 1990s spurred by policy reforms and changing incentives these innovations have led to sustained growth in aggregate cereal crop yields since 1985 africa s belated green revolution is based on new varieties often with early maturation for drought escape complemented by new management techniques typically labor intensive efforts to conserve soil moisture and build soil fertility

measuring the performance of foreign direct investment a case study of china abstract within the new growth framework this paper attempts to investigate the performance of foreign direct investment i e how efficient fdi as one of the factor inputs in an economy has been utilised in the empirical analyses an input oriented distance function approach is employed to estimate the technical efficiency of fdi in china s coastal regions over the period 1983 1995

the long and short of money short run dynamics within a structural model empirical examinations into aggregate money demand functions generally incorporate a monetary aggregate as the dependent variable while this custom may be inefficient it does not create any new difficulties for estimating the demand function s long run parameters as money supply would equal money demand the short run estimates however are not as fortunate as the monetary aggregate is a measure of supply and not demand one needs to tease out the short run responses associated with money demand changes with those which are associated with monetary supply shocks the present article therefore proposes a more complete representation of monetary sector behaviour and in doing so finds significant support for the so called buffer stock money demand models

monetary anticipations and the demand for money reply to mackinnon and milbourne abstract mackinnon and milbourne 1984 in an extended comment on carr and darby 1981 claim that money supply shocks do not enter the money demand function for the united states this reply discusses the economic and econometric errors which led to this conclusion and presents further empirical evidence in support of our approach

money and prices evidence from the g7 countries this paper examines the exogeneity of money and prices within a money demand vector error correction model the exogeneity of the variables is central to several buffer stock models however the paper makes two modifications to the traditional approach the first is to explicitly acknowledge the importance of the supply of money function by including the function alongside its demand counterpart the second is to estimate the behaviour of the nominal sector and real sector simultaneously overall the results from the g7 countries suggest that the concerns raised by buffer stock models are relevant

instability of the u s money demand function this paper surveys the two major episodes of instability of the u s money demand function known respectively as the mystery of missing money and the great velocity decline it also assesses the recent literature on open economy money demand models and their usefulness in explaining the puzzling behavior of money demand manifested shortly after the transition to floating exchange rates copyright 1991 by blackwell publishers ltd

what are the farm level impacts of malawi s farm input subsidy program a critical review this article provides a critical analysis of the current frontier of research evaluating malawi s farm input subsidy program fisp whose main objectives are increasing maize production promoting household food security and enhancing rural incomes we focus on farm level studies in malawi identifying consistent and contrasting research results in order to draw important policy lessons and provide suggested avenues for future research while national production estimates suggested dramatic increases in maize production and productivity during the years of the fisp the farm level studies found relatively modest increases in maize production and yields over the same period consistent with the farm level results of modest maize production increases there has been a relative increase in real maize prices and the country continued to import maize during most of the subsidy program years furthermore there is evidence that better off households gained substantially more than poorer households when they participated in the program together these findings cast some doubt on the fisp s ability to reduce food insecurity and poverty we propose a number of policy lessons and suggestions for rigorous investigation including research that directly measures the causal impacts of the fisp program on poverty in malawi

budget constrained frontier measures of fiscal equality and efficiency in schooling equality and efficiency are key issues in educational reform here the authors analyze the efficiency and equality consequences of various school finance reforms using a cost indirect output distance function this function readily models multiple output production under conditions of budgetary constraint and provides a natural measure of performance that is closely related to farrell type measures of efficiency the analysis suggests that despite school district inefficiency finance reforms can affect student achievement however any potential gains in output from redistribution are dwarfed by the potential gains from increased efficiency more strikingly the analysis demonstrates that budgetary reforms designed to equalize expenditures could actually increase the inequality of student achievement

estimating money demand functions the question of which functional forms of money demand regression equations are useful for empirical work is addressed here specifically it is argued that a functional form that focuses attention on the ability of the growth rate of nominal money to predict the inflation rate is a useful way of summarizing empirical evidence on the existence of a stable money demand function the results of estimating and simulating this functional form as well as standard functional forms are presented in the final part of this paper a typical equation expressing the public s demand for real money balances m is as follows

measuring the opportunity cost of holding money more evidence on the term structure of interest rates abstract this paper tests the statistical importance and forecasting performance of a term structure money demand equation relative to two competing specifications the evidence indicates that the term structure specification is preferred to one using a long term interest rate but not a short term rate forecasts for 1981 1982 reveal that the term structure model is preferable to both alternatives

the impact of the 1999 cap reforms on the efficiency of the cop sector in spain the cereal oilseeds and protein crop sector cop occupies a prominent position within the european union s agricultural sector within spain the cop sector accounts for almost a third of total agricultural guidance and guarantee fund expenses and half of the utilized agricultural area uaa the cop sector is not only relevant because of its physical and economic magnitude but also because of the political attention it receives the common agricultural policy cap reforms that occurred during the 1990s paid special attention to this sector this article aims to determine the impacts of agenda 2000 on a sample of spanish cop farmers production decisions by using an output oriented stochastic distance function the distance function allows for an assessment of the reform motivated changes on total output input used input composition and crop mix it also permits an assessment of the impacts of the reform on farms technical efficiency results show that the reform has shifted the production frontier inward and changed output composition in favor of voluntary set aside land with respect to input composition agenda 2000 induced a decrease in land fertilizers pesticides and other inputs in favor of labor in addition agenda 2000 has had a negative impact on technical efficiency

input subsidy programs in sub saharan africa a synthesis of recent evidence input subsidy programs have once again become a major plank of agricultural development strategies in africa ten african governments spend roughly us 1 billion annually on input subsidy programs isps amounting to 28 6 of their public expenditures on agriculture this article reviews the microlevel evidence on isps undertaken since the mid 2000s we examine the characteristics of subsidy beneficiaries crop response rates to fertilizer application and their influence on the performance of subsidy programs the impacts of subsidy programs on national fertilizer use and the development of commercial input distribution systems and finally the impact of isps on food price levels and poverty rates the weight of the evidence indicates that the costs of the programs generally outweigh their benefits findings from other developing areas with a higher proportion of crop area under irrigation and with lower fertilizer prices factors that should provide higher returns to fertilizer subsidies than in africa indicate that at least a partial reallocation of expenditures from fertilizer subsidies to r d and infrastructure would provide higher returns to agricultural growth and poverty reduction however because isps enable governments to demonstrate tangible support to constituents they are likely to remain on the african landscape for the foreseeable future hence the study identifies ways in which benefits can be enhanced through changes in implementation modalities and complementary investments within a holistic agricultural intensification strategy among the most important of these are efforts to reduce the crowding out of commercial fertilizer distribution systems and programs to improve soil fertility to enable farmers to use fertilizer more efficiently the challenges associated with achieving these gains are likely to be formidable

conditional cash transfers and school dropout rates this paper evaluates a united kingdom pilot study designed to test whether a means tested conditional cash transfer paid to 16 to 18 year olds for staying in full time education is an effective way of reducing the proportion of school dropouts the transfer s impact is substantial in the first year full time education participation rates increase by around 4 5 percentage points while the proportion receiving two years of education increases by around 6 7 percentage points those receiving the full payment have the largest initial increase in participation and some evidence is found suggesting that part of the effect can be explained by liquidity constraints

how effective are fiscal incentives for r d a review of the evidence this paper surveys the econometric evidence on the effectiveness of fiscal incentives for r d we describe the effects of tax systems in oecd countries on the user cost of r d the current position changes over time and across different firms in different countries we describe and criticize the methodologies used to evaluate the effect of the tax system on

zombie lending and depressed restructuring in japan this paper explores the role that misdirected bank lending played in prolonging the japanese macroeconomic stagnation that began in the early 1990s the investigation focuses on the wide spread practice of japanese banks of continuing to lend to otherwise insolvent firms we docu ment the prevalence of this forbearance lending and show its distorting effects on healthy firms that were competing with the impaired firms the paper by hoshi 2000 was the first to call attention to this phenomenon and its ramifi

costly portfolio adjustment and the short run demand for money in many empirical studies the short run demand for money includes a lagged dependent variable this is usually attributed to some cost of adjusting money balances toward their desired level this short run money demand equation is sometimes used as a structural equation in models in which market clearing is also assumed in the sense that money supply equals short run money demand in this paper a theoretical counterexample demonstrates that this use of a short run money demand equation is not generally valid this finding challenges the usual interpretation of the lagged dependent variable

buffer stock money interpreting short run dynamics using long run restrictions time series techniques are used to assess the quantitative importance of buffer stock money the short run response of real money holdings to nominal money supply shocks the empirical model a vector autoregression of real and nominal money balances captures general dynamic properties of the time series but requires theoretical restrictions for sensible interpretation the authors just identify the system by imposing a long run neutrality restriction nominal money shocks have no permanent effects on real money they find that buffer stock effects play an important role in the evolution of real m1 in the short run the evidence for m2 is less conclusive copyright 1994 by ohio state university press

stochastic estimation of firm inefficiency using distance functions econometric estimation of allocative and technical efficiency has frequently been carried out using a shadow cost function and its associated share or demand equations since the problem is formulated in terms of shadow prices the effect of allocative inefficiency on input usage must be computed indirectly from input share or demand equations as an alternative approach we derive and estimate an input shadow distance system comprising the dual shadow input distance function and the price equations derived from the shadow cost minimization problem estimated shadow quantities provide direct estimates of the effect of allocative inefficiency on input usage one can also easily calculate firm and time varying technical inefficiency by decomposing the residuals we also compute returns to scale and the cost savings obtained by eliminating both types of inefficiency our approach is illustrated using a panel of u s railroads both the cost function and the distance function are valid representations of multioutput technologies the arguments of the cost function are output quantities and input prices while the arguments of the distance function are input and output quantities the input distance function measures the extent to which the firm is input efficient in producing a given set of outputs while the cost function assumes cost minimization by a firm which is input efficient the shadow cost function is a generalization of the cost function and depends on output quantities and shadow internal to the firm input prices rather than actual market input prices thus the shadow cost function assumes shadow cost minimization but not actual cost minimization this function has frequently been employed in fixed effects estimation of allocative efficiency ae and technical efficiency te an observed input vector is technically efficient if it is on the isoquant of the observed output vector an input vector is allocatively efficient if the radial contraction of the input vector to the isoquant is cost minimizing identification of parameters that measure ae can be achieved by the estimation of a shadow cost system comprising the actual cost equation and the share or input demand equations which are expressed in terms of shadow prices and output quantities shadow cost systems have been estimated by atkinson and halvorsen 1984 sickles good and johnson 1986 eakin and kniesner 1988 kumbhakar 1992 and atkinson and cornwell 1994 among others given panel data the deviation of shadow from actual input prices can be measured by price specific inefficiency parameters that may vary across firms and over time however the estimation of the effect of

a dual measure of economies of scope a derivative based measure of economies of scope is obtained by exploiting the duality between the shadow cost function and the input distance function this is a useful measure when the econometric estimation of a cost function is not viable

multilateral productivity comparisons when some outputs are undesirable a nonparametric approach multilateral productivity comparisons of firms producing multiple outputs some of which are undesirable are obtained by making two modifications to the standard farrell approach to efficiency measurement the restriction that production technology satisfy strong disposability of outputs is relaxed to allow for the fact that undesirable outputs may be freely disposable and the efficiency measures are modified to allow for an asymmetric treatment of desirable and undesirable outputs performance measures that satisfy these requirements are calculated as solutions to programming problems the methodology is applied to a sample of mills producing paper and pollutants

scope economies and technical efficiency of cocoa agroforesty systems in ghana a number of studies have addressed issues relating to the physiological environmental and economic values of trees in cocoa farming systems however to date little has been done to quantitatively examine the effect of crop diversity on cocoa farming efficiency this study therefore sets out to first investigate whether and to what extent crop diversity defined as the mixing of cocoa with other crop species on farmers plots affects productivity on cocoa farms secondly it sought to establish whether there are economies of scope i e cost complementarities from the sharing of farm inputs by crops on the same plots our results indicate that diversified i e multi crop cocoa farms are more efficient than single i e mono crop farms furthermore our estimate for the economies of scope parameter indicates possibilities for cost complementarities between production of cocoa and other crops on the same plot we advocate further investigation on the issue of scope economies to determine which crop combinations offer better cost complementarities and also meet biodiversity conservation objectives

efficiency in the international insurance industry a cross country comparison the purpose of this paper is to provide new empirical evidence on frontier efficiency measurement in the international insurance industry a topic of great interest in the academic literature during the last several years a broad efficiency comparison of 6462 insurers from 36 countries is conducted different methodologies countries organizational forms and company sizes are compared considering life and non life insurers we find a steady technical and cost efficiency growth in international insurance markets from 2002 to 2006 with large differences across countries denmark and japan have the highest average efficiency whereas the philippines is the least efficient regarding organizational form the results are not consistent with the expense preference hypothesis which claims that mutuals should be less efficient than stocks due to higher agency costs only minor variations are found when comparing different frontier efficiency methodologies data envelopment analysis stochastic frontier analysis

productivity under the 1997 2010 labour government what was the productivity record under the labour government of 1997 2010 i show that productivity growth and economic performance in general was good when the uk is compared with its main international peers only the us had stronger productivity growth and the uk did better than the us in terms of the jobs market much of this improved performance was a continuation of the pattern since 1979 which broke a century of relative decline some part of the improvement is directly linked to policies especially over human capital innovation and competition we discuss the recent productivity puzzle the disappointing productivity figures since the onset of the great recession in 2008 and argue that our conclusions are unchanged as most other oecd countries have also experienced poor measured productivity

the impact of formal finance on the rural economy of india india has systematically pursued a supply led approach to increasing agricultural credit its objectives have been to replace moneylenders to relieve farmers of indebtedness and to achieve higher levels of agricultural credit investment and output india s success in replacing moneylenders has been outstanding between 1951 and 1971 their share of rural credit appears to have dropped from more than 80 percent to 36 percent it may have dropped to as low as 16 percent by 1981 but that estimate is disputed still institutional credit is far from reaching all farmers only about a quarter of cultivators borrow and no more than 2 percent take out long term loans most small farmers have little access to credit and long term credit goes mostly to large farmers overall farm debt has probably not increased sharply in real terms as formal credit has primarily substituted for credit from other sources moreover with the rapid growth of commercial banks in the 1970s the system mobilized more deposits than it lent in rural areas in 1981 of course enhanced deposit services are a useful service of the rural population but one must ask what has been the impact of heavy rural credit and better financial services on agricultural investment production and rural incomes the authors econometric results suggest that the rapid expansion of commercial banks in rural areas has had a substantially positive effect on rural nonfarm employment and output the availability of better banking facilities appears to have overcome one of the obstacles to locating nonfarm activities in rural areas expanded rural finance has had less of an effect on output and employment in agriculture than in the nonfarm sector the effect on crop output has not been great despite the fact that credit to agricluture has greatly increased the use of fertilizer and private investment in machines and livestock there has been more impact on inputs than on output so the additional capital investment has been more important in substituting for agriclutural labor than in increasing crop output but overall rural credit and expansion of the rural financial system have had a positive effect on rural wages creating nonfarm jobs has apparently added more to total employment than the substitution of capital for labor has subtracted it in agriculture so wages have risen even for agricultural workers albeit modestly the supply led approach to agricultural credit that has been pursued for three decades has clearly benefited current borrowers and farm households formerly indebted to moneylenders it has also spurred fertilizer use and investment in agriculture it has been less successful in generating viable institutions and has failed to generate agricultural employment the policy s costs to india s government have been high as portfolio losses associated with poor repayment ultimately have to be borne by the government or one of its institutions under optimistic assumptions the benefits of the agricultural income are at best no more than 13 percent higher than the cost to the government of the extra agricultural credit if assumptions about the cost of supplying the credit and about repayment rates are less optimistic the social costs and the costs to the government of providing the credit would have exceeded the benefits in agricultural income the expansion of commercial banks to rural areas paid off in nonfarm growth employment and rural wages the question is could these benefits have been achieved without imposing agricultural credit targets on the commercial banks and credit cooperatives or did the commercial banks expand only because they were forced to lend to agriculture the authors could not answer these questions with the data at hand

efficiency in new zealand sheep and beef farming the impacts of regulatory reform in this study we consider the impacts of dramatic regulatory reform during the 1980s on the efficiency of farms in new zealand using unbalanced panel data a translog distance function representing the multiple output and input technology and incorporating nonneutral regulatory impacts is used for the analysis determinants of technical inefficiency including a regulatory variable a time term and a debt equity ratio are also incorporated in a one step model estimated by maximum likelihood stochastic production frontier methods we find evidence of regulatory induced changes in output composition toward beef and deer and away from wool and especially lamb but little associated technical inefficiency these patterns motivated investment in complementary capital land and beef deer livestock inputs firms that were more flexible in their adaptation toward these new mixes adjusted to regulatory changes with less upheaval so any existing inefficiency appears linked to debt equity levels

wage and employment effects of malawi s fertilizer subsidy program this article uses three waves of nationally representative household level panel data from malawi to estimate how a large scale fertilizer subsidy program impacts the agricultural labor market known as ganyu in that country i find that when looking across the entire population of smallholders receiving an additional 100 kg of subsidized fertilizer causes the average household to supply about three fewer days of ganyu the fertilizer subsidy program also has a small positive effect on the probability that a household demands agricultural labor with the results approaching statistical significance in addition a 10 kg increase in the average amount of subsidized fertilizer acquired per household in a community boosts the median agricultural wage rate by 1 4 in that community the increase in wage rates translates to a us 1 40 per year increase in average household income in the years after malawi s subsidy program was scaled up and a us 1 86 per year increase in average household income for those who sold their labor before the subsidy program was scaled up this finding suggests that households who sell their labor off farm may experience some small spillover benefit from the program in the form of higher agricultural wage rates

us banking efficiency 1984 1995 abstract we estimate the time varying average efficiencies of the us banks during 1984 1995 with four different efficiency estimators using these four series of efficiency estimates we make a multivariate kalman filter analysis to examine the efficiency trend in us banks during this period

decent rural employment and farm production efficiency empirical evidence from tanzania and ethiopia promoting decent rural employment by creating new jobs in rural areas and upgrading the existing ones could be one of the most efficient pathways to reduce rural poverty this article systematically investigates the impact of decent rural employment on agricultural production efficiency in ethiopia and tanzania the analysis applies an output oriented distance function approach with an estimation procedure that accounts for different technological demographic socioeconomic institutional and decent rural employment indicators data of the 2011 round of living standards measurement study integrated surveys on agriculture for the two countries are used and a set of indicators is derived to proxy core dimensions of decent rural employment the findings of our analysis show that decent rural employment contributes to agricultural production efficiency

measuring and decomposing productivity change measuring productivity change with malmquist indices has become common practice because they are easily computed using nonparametric programming techniques and can be readily decomposed into technical and efficiency change however this approach is nonstochastic and requires a constant returns to scale assumption to construct the reference technology we propose estimating productivity change using a stochastic input distance frontier imposing no restrictions on returns to scale we derive the analogous decomposition of productivity change and develop a generalized method of moments strategy in which outputs or inputs may be endogenous we compare two methods in an application to electric utilities

off farm labour and the structure of us agriculture the case of corn soybean farms while the growing importance of off farm earnings suggests large benefits accrue to farmers from efforts to expand off farm income opportunities economic well being also depends on greater efficiency to comprehensively gauge the economic health of farm operator households off farm income is interpreted as an output along with corn soybeans livestock and other crops to accomplish this task two related methodologies were used first using 2000 data a multi activity cost function was set up to analyse labour allocation decisions within the farm operator household and also to estimate returns to scale and scope second using 1996 2000 data an input distance function approach was followed to estimate returns to scale cost economies and technical efficiency and the relative performance of farm operator households with and without off farm wages and salaries compared the cost function and input distance function results both suggest that off farm outputs and inputs can be modelled in a multi activi

how high are rates of return to fertilizer evidence from field experiments in kenya the idea that peasant farmers are rational profit maximizers has been a staple of development economics since theodore schultz 1964 it has also been influential in shaping policy for example agricultural experts have stressed the importance of fertilizer use in raising agricultural yields pointing to impressive results on experimental farms and to huge differences in agricultural productivity across countries with different levels of fertilizer use robert evenson and douglas gollin 2003 historically many countries subsidized fertilizer in response but economists have been skeptical of claims that farmers are leaving money on the table noting that fertilizer may not have the same returns on real world farms as on experimental farms that returns to fertilizer may be low for many farmers even if they are high on average tavneet suri 2007 that fertilizer may require complementary inputs or may be risky many countries have withdrawn or scaled back fertilizer psychology and development theory and experimental evidence

the economic record of the 1997 2010 labour government an assessment we consider the economic record of the 1997 2010 labour government in the uk following a brief review of the government s inheritance from its predecessor we review the assessments made in the other papers in this issue of the oxford review of economic policy the change in the macroeconomic policy framework which apparently worked well for a decade but was then struck by the global financial crisis labour market social security and education policies and inequality public investment and public service delivery especially health and corporate taxation we discuss the constraints under which the government operated how much it broke with the past and the new frameworks it introduced we identify strengths and weaknesses and draw lessons from the government s record about the need to remain receptive to other and critical ideas on the one hand and the need for labour to spell out the kind of economy and society it wants to see develop on the other copyright 2013 oxford university press

mergers and technical efficiency in spanish savings banks a stochastic distance function approach abstract the aim of this paper is to test the temporal variation of technical efficiency of spanish savings banks during the period 1985 1998 furthermore we test whether merged and non merged firms have different levels and temporal patterns of technical efficiency a stochastic output distance function r w shephard theory of cost and production functions princeton university press princeton nj is employed to accommodate multiple output technology the distance function provides the advantage that it does not need information about prices so it can accommodate the multi product nature of the financial sector only using the quantities as data an important point when the assumptions about perfectly competitive markets are unlikely to be met the temporal variation of efficiency is modeled extending the battese and coelli journal of productivity analysis 3 1992 153 169 approach in two ways relaxing the monotonicity of the temporal variation pattern of the efficiency term and allowing for different patterns of efficiency change between merged and non merged firms

labour s record on financial regulation in 1997 the new labour government launched major initiatives in the area of financial regulation setting up the financial services authority as a comprehensive regulatory body supported by the legislative framework of the financial services and markets act 2000 we evaluate the labour government s record on financial regulation in terms of its achievements and failures especially in dealing with the global financial crisis that started in 2007 while we identify some clear flaws in regulatory design and enforcement our evaluation highlights some inherent difficulties of financial regulation

are price equations really money demand equations on their heads it is often argued that the dependent variable in money demand functions is really the price level the money stock itself being exogenous a recent approach which stresses the theme is the buffer stock hypothesis in which money supply shocks explicitly appear in the demand for money function because prices and interest rates do not adjust rapidly enough to bring about short run equilibrium in the money market although this approach has been adopted by a number of authors it is not been subjected to much econometric testing in this paper we outline the economic and econometric issues involved in testing the exogenous money buffer stock hypothesis and subject it to a variety of tests using three different data sets none of our results supports the hypothesis fundamental restrictions are rejected at very high levels of significance and a reasonably good money demand equation is seen to be badly misspecified if interpreted as a price equation this abstract was borrowed from another version of this item

fertilizer subsidies political influence and local food prices in sub saharan africa evidence from nigeria abstract the last decade has seen a resurgence in the use of fertilizer subsidies in sub saharan africa however there is limited empirical evidence on the effects of fertilizer subsidy programs on local food prices using an instrumental variables approach we explore the effect of a fertilizer subsidy program on the seasonal growth rates of grain prices in nigeria our results suggest that the fertilizer subsidy program had very small effects on the growth rates of grain prices between the post planting and post harvesting seasons we also find that political influence played a role in the distribution of subsidized fertilizer we discuss how the weak effects on the price growth rates may be caused by low market orientation output market structures greater focus on farmers incomes low marginal productivity of fertilizer and politically influenced targeting

disequilibrium buffer stock models a survey abstract this paper surveys the growing literature on buffer stock models of the monetary transmission process the first part indicates the basic issue of how assumed exogenous changes in the money supply work their way through the economic system via disequilibrium in the money market after a brief historical development buffer stock models are divided into four types depending upon whether the disequilibrium arises in stocks and or flows and to whether changes in the money stock are purely exogenous the empirical implications including how buffer stock models explain the recent behaviour of money demand functions are given theoretical and empirical criticisms of the models are presented in terms of the classification system the survey concludes that whilst the buffer stock notion is an interesting idea the current models do not lend themselves to empirical testing and those models which do have performed poorly

multi output nonfrontier primal measures of capacity and capacity utilization this article implements an econometric approach for generating primal capacity output and utilization measures for fisheries in situations where regulatory environmental and resource conditions affect catch levels but are not independently identified in the data frontier based capacity models may interpret such impacts as production inefficiency however if such inefficiencies are unlikely to be eliminated the implied potential output increases may be unrealistic we develop a multi output multi input stochastic transformation function framework that permits various assumptions about how output composition may change when operating at full capacity we apply our model to catcher processor vessels in the alaskan pollock fishery

the returns to education macroeconomics we offer an extensive summary and a critical discussion of the empirical literature on the impact of human capital on macro economic performance with a particular focus on uk policy we also highlight methodological issues and make recommendations for future research priorities taking the studies as a whole the evidence that human capital increases productivity is compelling though still largely divided on whether the stock of education affects the long run level or growth rate of gdp a one year increase in average education is found to raise the level of output per capita by between three and six percent according to augmented neo classical specifications while leading to an over one percentage point faster growth according to estimates from the new growth theories still over the short run planning horizon four years the empirical estimates of the change in gdp are of similar orders of magnitude in the two approaches the impact of increases at different levels of education appear to depend on the level of a country s development with tertiary education being the most important for growth in oecd countries education is found to yield additional indirect benefits to growth more preliminary evidence seems to indicate that type quality and efficiency of education matter for growth too

do input subsidy programs crowd in or crowd out commercial market development modeling fertilizer demand in a two channel marketing system many governments in developing countries distribute fertilizer at subsidized prices in an effort to stimulate small farmers agricultural productivity and food security prior fertilizer demand studies have largely failed to account for the effects of government programs on farmers commercial purchases using a double hurdle model and nationally representative rural household panel data in zambia we distinguish between these sources and measure the contemporaneous crowding in and crowding out effects of government input programs on commercial fertilizer sales where the private sector is relatively active and average wealth is higher areas seemingly more likely to be targeted by government programs results indicate that subsidies have substantially crowded out the private sector in some cases to the point that such programs could actually lower overall fertilizer use on the other hand in poorer areas where the private sector is relatively inactive subsidies help to generate demand and crowd in private sector retailers empirical studies explicitly modeling farmers fertilizer purchase behavior within a dual marketing framework can provide important insights for agricultural policy discussions in developing countries

evaluating the employment impact of a mandatory job search program this paper exploits area based piloting and age related eligibility rules to identify treatment effects of a labor market program the new deal for young people in the u k a central focus is on substitution displacement effects and on equilibrium wage effects the program includes extensive job assistance and wage subsidies to employers we find that the impact of the program significantly raised transitions to employment by about 5 percentage points the impact is robust to a wide variety of nonexperimental estimators however we present some evidence that this effect may not be as large in the longer run jel j18 j23 j38

international price behavior and the demand for money oil prices commodity prices and american monetary policy the last operating through a variety of channels have all figured prominently in explanations of the international inflation process in the late 1960s and early 70s out major purpose in this paper is to test these various hypotheses we do so in the context of a reduced form rational expectations price equation which we estimate for the united states and seven other industrial countries using quarterly data for the period 1955 through 1976 the principal conclusion that emerges from this exercise is that movements in domestic money in these countries served as the key link in the inflation process the factors that produced these monetary changes however differed among countries price shocks of various sorts were clearly of secondary importance the other important set of conclusions concerns the demand for money in place of a traditional stock adjustment model we used gls with a second order correction for autocorrelation we believe this produced more plausible estimates of the parameters of the long run demand function and of the adjustment process itself

productivity growth technical progress and efficiency change in industrialized countries this paper analyzes productivity growth in 17 oecd countries over the period 1979 1988 a nonparametric programming method activity analysis is used to compute malmquist productivity indexes these are decomposed into two component measures namely technical change and efficiency change we find that u s productivity growth is slightly higher than average all of which is due to technical change japan s productivity growth is the highest in the sample with almost half due to efficiency change jel c43 d24 in this paper we apply recently developed

the buffer stock notion in monetary economics not the least of harry johnson s contributions to our discipline was the series of survey papers on aspects of monetary economics which he produced during the 1960s and 1970s it is no exaggeration to say that the way in which the literature of monetary economics is organised even now follows the design which johnson first set out in 1962 and built on in the subsequent decade nevertheless the subject has not stood still and one of the more interesting developments of the last few years has involved the introduction of what has been variously described as the disequilibrium money shock absorber or as i prefer to call it the buffer stock notion into monetary economics the development of this line of thought was getting underway before johnson s untimely death much of it indeed under the auspices of his own research programme at the lse even so this did not happen early enough for the relevant ideas to be put in their proper niche by johnson himself and the buffer stock approach is not yet fully integrated into the mainstream of monetary economics much of the relevant literature is empirical concerned with modelling particular aspects of the monetary experience of specific countries hence it is fragmented and contains few papers which attempt a coherent account of just what this approach is and how it relates to other approaches to monetary analysis although essays by goodhart 1982a b and judd and scadding 1982a contain important discussions of these issues to the best of my knowledge only jonson 1976a and knoester 1979a have devoted entire papers solely to this central issue and these are relatively inaccessible and hence less widely known than they deserve to be in this lecture i shall attempt to give a brief account of the essentials of this approach first i shall sketch out its microeconomic background and then i shall discuss those theoretical characteristics which differentiate it from the neo austrian analysis of robert e lucas jr and his associates as well as from the conventional keynesian approach to monetary economics last but by no means least i shall argue that it yields simple theoretical insights into important empirical and policy related issues which are troublesome for alternative approaches in short my tribute to harry

fertilizer subsidy and agricultural productivity in senegal in a consistent effort to raise productivity and unlock the economic and social potential of the agricultural sector the senegalese government has implemented heavy subsidy programs some of which target the use of inputs this paper assesses the potential impact of the fertilizer subsidy on farmers productivity we use data envelopment analysis to generate efficiency scores which are then related to the subsidy program using an endogenous treatment regression model that accounts for potential endogeneity and self selectivity issues the results indicate that the subsidy program appears to be associated with increased efficiency hence providing empirical support to the political will to revamp the program the results also suggest ways to improve the effectiveness of the subsidy program as well as additional policy options to further unlock the agricultural potential

economic efficiency and frontier techniques abstract most of the literature related to the measurement of economic efficiency has based its analysis either on parametric or on non parametric frontier methods the choice of estimation method has been an issue of debate with some researchers preferring the parametric and others the non parametric approach the aim of this paper is to provide a critical and detailed review of both core frontier methods in our opinion no approach is strictly preferable to any other moreover a careful consideration of their main advantages and disadvantages of the data set utilized and of the intrinsic characteristics of the framework under analysis will help us in the correct implementation of these techniques recent developments in frontier techniques and economic efficiency measurement such as bayesian techniques bootstrapping duality theory and the analysis of sampling asymptotic properties are also considered in this paper

can modern input use be promoted without subsidies an analysis of fertilizer in ethiopia fertilizer use in ethiopia has nearly quintupled since official elimination of direct input subsidies in the early 1990s during this time policies changed from liberalization with both private and public sector participation to a government monopoly over imports along with exclusive marketing through farmers cooperatives this article presents estimates of detail costs and margins in the value chain econometrically derived profitability and yield responses as well as costs of the government s fertilizer promotion policies results suggest that a irrespective of the methods of calculation fertilizer use in major cereal is profitable b while there is no official subsidy program fertilizer promotion has involved large fiscal costs estimated at us 40 million per year since 2008 and c there has been a mismatch between government s policy targets and the effective fertilizer demand resulting in large carryover stock with estimated implicit costs of us 30 million per year during 2008 2011 areas of policy attention value chain improvements and ongoing efforts to improve for fertilizer use and profitability are discussed

agricultural technology productivity and poverty in madagascar summary this paper uses a unique spatially explicit dataset to study the link between agricultural performance and rural poverty in madagascar we show that controlling for geographical and physical characteristics communes that have higher rates of adoption of improved agricultural technologies and consequently higher crop yields enjoy lower food prices higher real wages for unskilled workers and better welfare indicators the empirical evidence strongly favors support for improved agricultural production as an important part of any strategy to reduce the high poverty and food insecurity rates currently prevalent in rural madagascar