effects of packers inventory and market power on price adjustments in the u s beef industry this study examines effects of packers inventory and market power on their price adjustment behaviour in the u s beef industry econometric model used in the study allows inventory and market pow

multiproduct short run hospital cost functions empirical evidence and policy implications from cross section data economists and policymakers have been interested in hospital costs and the structure of hospital technologies for several decades now early interest was focused on the possibility of scale economies which implied increased efficiency for larger hospitals 6 8 12 13 18 20 while more recent interest has been stimulated by the inflationary spiral of hospital costs 1 15 17 22 as hospital costs have risen important policy questions concerning the impact on costs of the hospitals diagnostic case mix the hospitals admitting physicians the hospitals size and the hospitals efficiency have emerged and researchers have attempted to deal with these issues within the context of increasingly complex econometric models 1 2 5 24 27 however in attempting to analyze these important policy issues researchers have been forced to make two major types of compromises on the one hand appropriate data are often not available for estimating a well specified cost function e g information on admitting physicians and diagnostic case mix are often missing so that problems of specification error often plague the econometric results conversely in using imaginative ways to deal with data problems e g weighting in patient and out patient care to form a single index of hospital services 1 27 or estimating separate cost functions for each department in the hospital 2 researchers sometimes place unrealistic and unnecessary constraints on their econometric models the purpose of this study is to analyze the impact of several of the primary hospital characteristics mentioned above on the short run costs of hospitals within a theoretically consistent framework in the following discussion we also develop the theoretical

scale economies and consolidation in hog slaughter we use establishment based panel data to estimate a cost function which identifies the role of scale economies in hog slaughter consolidation we find modest but extensive technological scale economies in the 1990s and they became more important over time but wages rose sharply with plant size through the 1970s and those wage premiums generated a pecuniary scale diseconomy that largely offset the effects of technological scale economies the size wage relation disappeared in the 1980s with growing technological scale economies and disappearing pecuniary diseconomies large plants realized growing cost advantages over smaller plants and production shifted to larger plants copyright 2000 oxford university press

approaches and methods for the econometric analysis of market power a survey and empirical comparison this study discusses two widely used approaches in the new empirical industrial organization neio literature and examines the strengths and weaknesses of the production theoretic approach pta and the general identification method gim for the econometric analysis of market power in agricultural and food markets we provide a framework that may help researchers to evaluate and improve structural models of market power starting with the specification of the approaches in question we compare published empirical studies of market power with respect to the choice of the applied approach functional forms estimation methods and derived estimates of the degree of market power thereafter we use our framework to evaluate several structural models based on pta and gim to measure oligopsony power in the ukrainian dairy industry the pta based results suggest that the estimated parameters of oligopsony power are significantly different from zero while gim based results do not indicate any evidence of oligopsony market power in the ukrainian dairy industry moreover estimations results vary substantially due to the employed estimation procedure

heterogeneity and the evaluation of efficiency the case of italian universities a random parameters stochastic frontier model is applied to italian data in order to evaluate the cost function and efficiency of higher education institutions the method yields useful information about inter institutional variation in cost structure and technical efficiency returns to scale and scope are evaluated for the typical university and it is found that these returns are almost ubiquitously decreasing a finding with clear policy implications

estimating economies of scale in higher education abstract if colleges and universities periodically operate at unexpected enrollment levels measured costs may reflect short run rather than long run minimum average costs for different levels of output if there is a systematic relationship between operating at disequilibrium and institutional size cross sectional estimates of the degree and level of scale economies may be biased using data from 1987 88 we assess the importance of the equilibrium assumption for estimates of scale economies in higher education

costs and factor substitution in the provision of local fire services evidence on costs and factor substitution is presented for a sample of local fire departments in new york state the results suggest that fire service production does not fit either leontief cobb douglas or ces technology in addition exogenous socioeconomic variables are found to significantly affect public sector costs and the estimates of factor price elasticities the findings of relatively low factor demand and substitution elasticities suggest that local governments may have limited flexibility in adjusting their production of fire services to minimize the impact of rising factor prices copyright 1992 by mit press

the design of the university system abstract this paper compares the organisation of the university sector under unregulated private provision with the structure which would be chosen by a welfare maximising government it studies a general equilibrium model where students attend university to earn higher incomes in the labour market and universities teach them and carry out research each university chooses its tuition fee to maximise the amount of resources it can devote to research research bestows an externality on society government intervention needs to balance labour market efficiency considerations which would tend to equalise the number of students attending each university with considerations of efficiency on the production side which suggest that the most productive universities should teach more students and carry out more research we find that government concentrates research more that the private market would but less than it would like to do if it had perfect information about the productivity of universities it also allows fewer universities than would operate in a private system

hospital costs and competition for services a multiproduct analysis the authors estimate the effects of market structure on hospital costs using a translog multiproduct cost function recognizing the multiplicity of services provided by hospitals the results show that costs are substantially determined by service configuration and that there are distinct economies of size and sco pe the model also distinguishes market concentration measures by servic e type including obstetrics radiation therapy diagnostic imaging a nd surgery estimates show that after controlling for the other determinants of cost the degree of competition has only modest cost increasing effects copyright 1992 by mit press

amalgamations of universities are there economics of scale or scope this paper estimates a multiple output cost function for australian universities the estimates are used to evaluate the cost savings arising from the amalgamation of two or more institutions thes

effects of horizontal consolidation under bilateral imperfect competition between processors and retailers this article considers bilateral imperfect competition between processors and retailers to estimate the trade off between market power and cost efficiency the model is based on pricing rules from a firm s profit maximization and nests both oligopoly and oligopsony models an empirical analysis for us beef processors and retailers suggests that processors tend to exercise oligopsony market power in procuring cattle but they are unlikely to exercise market power on retailers when retailers and processors are considered as one integrated sector efficiency effects from the increased concentration in the us beef packing industry are slightly larger than market power effects when processors market power is considered separately from retailers market power the difference between cost saving and market power effects becomes greater the cost elasticity estimate 0 99 indicates that a further merger would result in little economies of scale in the future therefore although we find that efficiency effect

technological change rediscovering the engine of productivity growth in china s rural economy abstract this paper focuses on measuring the relative importance of the role of technology versus that of institutional innovation in china s rural economy a six equation rice sector model explaining provincial level technology adoption yield and factor demand are econometrically estimated using data from china s 13 rice growing provinces for the period 1975 1990 growth decomposition analysis identifies technology adoption as the most important determinant of rice yield growth during 1978 1984 accounting for nearly 40 percent the change institutional reform accounted for 35 percent of the growth in 1985 1990 technology accounts for all of the increase in rice yields the study demonstrates earlier studies may have over estimated the impact of decollectivization

the creation and spread of technology and total factor productivity in china s agriculture the overall goal of this study is to create a framework for assessing the trends of china s national and international investment in agricultural research and to measure its impact on total factor productivity the main methodological contribution is to provide more convincing measures of crop specific technologies from china s national research program and of those imported from the international agricultural research system our results find that from 1980 to 1995 china s total factor productivity for rice wheat and maize grew rapidly and new technology accounts for most of the productivity growth

skilled immigration and innovation evidence from enrolment fluctuations in us doctoral programmes we study the contribution of foreign science and engineering talent to the creation of new knowledge in the u s economy using panel data on 2300 science and engineering s e departments at 100 large american universities from 1973 to 1998 we use macroeconomic shocks and policy changes in source countries that differentially affect enrollments across fields and universities to isolate exogenous variation in the supply of students at specific departments both foreign and domestic graduate students are central inputs into knowledge creation and the marginal foreign student contributes more to the production of scientific publications and citations a 10 decrease in the foreign share of doctoral students lowers s e research output at u s universities by 5 6 a theoretical model of university admissions and scholarships helps us infer the productivity effects of student quality and econometric results indicate that any visa restrictions limiting entry of highquality foreign students is most costly for u s innovation increased diversity appears to be the primary mechanism by which foreign students improve research outcomes the impact of more restrictive immigration policies depends on how they affect the quality margin and diversity of incoming foreigners

the tradeoff between oligopsony power and cost efficiency in horizontal consolidation an example from beef packing in this paper we model the tradeoff between regional oligopsony power and cost efficiency resulting from consolidation in a food processing industry the model can be used to calculate the cost reductions necessary to offset the anticompetitive effects of market power and to compare them to actual cost savings achieved through plant scale or multiplant operating economies for an application we choose the beef packing industry for this case we find that the estimated cost savings necessary to neutralize the anticompetitive effects of consolidation in beef packing are about half the actual cost savings from scale economies

multiproduct monopoly regulation and firm costs regulation of public utiilties has traditionally been justified on the grounds that firm long run average costs fall with increased output in these industries for this reason it has been argued that cost efficiency dictates that a single firm supply the product ideally regulation of public utilities prevents monopolistic pricing while still permitting the most cost efficient industrial structure a large amount of theoretical and applied research has shown however that regulation in these industries generally does not guarantee that regulated firm costs are held at the lowest possible level for a given amount of output it seems then that regulation results in a tradeoff between cost savings from efficient industrial organization and cost inefficiencies generically known as x inefficiencies in this paper a new dimension of this tradeoff is examined specifically the paper explores whether cost efficiencies that are thought to characterize multiproduct public utilities are offset by increased costs permitted by a lack of inter energy competition in the next section a framework is constructed that is capable of identifying the cost structure for multiproduct firms and its relationship to efficient industrial structure section iii examines the sources of multiproduct economies and diseconomies for regulated multiproduct public utilities the cost structure is then estimated in section iv for single and multiproduct electricity and natural gas utilities section v considers the implications of the empirical analysis

the cost structure of american research universities 1597 this study estimates translog variable cost functions for 147 american doctorate granting universities accounting for three major products of these institutions undergraduate and graduate instruction and research explicit measures of research output and quality are employed evidence is found for considerable economies of scale for the average institution as well as economies of scope related to the joint production of undergraduate and graduate instruction the public or private ownership of an institution is not significant for the explanation of variable costs the intensity of state regulation in the public sector does not have a significant impact on production efficiency copyright 1991 by mit press

economies of size and scope in rural low volume roads evidence on cost savings from reorganizing township low volume rural road systems into larger units is presented in this study of technical efficiencies in producing local government services data is from a sample of midwestern townships heterogeneity of surface types is accounted for by specifying a multiple output translog cost function examination of economies of size suggests that cost savings could be realized by reorganizing townships into larger units the presence of economies of scope suggests that jurisdictions should not specialize in maintenance responsibilities due to the joint use of inputs

competition and diversification in public and private higher education the development of mass higher education and growing competition between higher education institutions has given increasing visibility to the issue of diversification this article analyses the issue of programme diversification using a panel of 181 portuguese higher education institutions over the period 1995 to 2007 by comparing the behaviour of public and private institutions the results show that the legal status of institutions is the major determinant of programme diversification as private institutions are far more specialized than their public counterparts the study also evaluates the role of other institutional variables such as the institution s size age location institutional mission and research intensity to explain differences in the diversification behaviour of higher education institutions the results provide important insights as competition has been thought to improve the performance of higher education institutions

estimating economies of scope using profit function a dual approach of the normalized quadratic profit function abstract theoretical relationships between parameters of the normalized quadratic profit and cost functions are derived allowing for economies of scope to be calculated using profit function estimates an empirical example confirms that the cost function is recovered using the estimated profit function

institutions of higher education as multi product firms economies of scale and scope a multiple output cost function is estimated for institutions of higher education in the united states employing data for 1981 82 the authors flexible fixed cost quadratic function includes three outputs undergraduate teaching graduate teaching and research grants and one input price average faculty salaries results indicate the existence of scope economies at least up to a point for both public and private institutions of higher education ray economies of scale are more pronounced in the private sector and product specific economies of scale are observed only in the public sector for research and graduate teaching copyright 1989 by mit press

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

economies of diversification a generalization and decomposition of economies of scope abstract the paper investigates the benefits of diversification for a multi product firm it examines economies of diversification reflecting the cost reduction associated with producing outputs in an integrated firm compared to specialized firms the analysis applies under complete specialization as well as partial specialization when firms are not fully specialized and or when the specialization scheme does not cover all outputs it decomposes economies of diversification into four additive parts a part measuring complementarity among outputs a part reflecting economies of scale a part reflecting convexity and a part reflecting the role of fixed cost this new decomposition appears useful in investigating how scale effects complementarity effects and convexity effects can contribute to economies of scope in a multiproduct firm and helps generate valuable insights into the economics of specialization for multiproduct firms

carbon efficiency of us colleges and universities a nonparametric assessment abstractunder the american college and university presidents climate commitment acupcc institutes of higher education have pledged to pursue a goal of carbon neutrality we utilize emissions reported under the acupcc agreement and a nonparametric data envelopment analysis approach in order to evaluate the relative performance of signatories to the agreement in terms of producing teaching and research with the least greenhouse gas emissions we find that while many signatory institutions are now producing their desirable outputs relatively efficiently in terms of carbon emissions there still exists considerable variation in efficiency and potential for improvement results of a second stage efficiency change analysis shows evidence of both movement towards the efficiency frontier since signing and some movement of the frontier itself though this evidence comes primarily from teaching focused institutions

economies of scale and economies of scope in multiproduct financial institutions a study of british columbia credit unions this paper investigates the production technology facing computerized credit unions in canada a full system of translog cost equations is estimated in order to test for economies of scale economies of scope and other production characteristics in a multiproduct context the regression results indicate that most of the credit unions in our sample experience significant increasing returns to scale as they expand their level of output there is also evidence of cost complementarity or economies of scope in their mortgage and other lending activities as a result legislation which limits the ability of credit unions to grow and diversify will likely raise the operating costs of this important group of financial institutions additional structural tests of the most general translog specification suggest that none of the restrictive production conditions commonly imposed by other researchers using cobb douglas and ces specifications provide a valid representation of credit union technology the results of many earlier studies are therefore open to question this paper presents a number of structural tests of the production technology facing large computerized credit unions in canada a full system of translog cost equations is estimated using detailed cross sectional data on british columbia credit unions the parameter estimates obtained from our multiproduct specification allow us to test for economies of scale economies of scope and factor substitution unlike many earlier studies the present paper introduces the various outputs as separate variables instead of crudely proxying them with a single output measure such as total assets the total number of loans or the number of depositors by explicitly recognizing the multiproduct nature of the intermediation process we are able to address more interesting production questions and remove some of the bias caused by misspecification and measurement error in simpler approaches the flexible translog specification allows us to estimate the sensitivity of costs to proportionate increases in all outputs economies of scale as well as the cost savings firms realize by producing several outputs jointly rather than specializing in the production of one economies of scope the test results reported in the latter part of the paper suggest that increasing returns to scale exist in almost all of the credit unions in our sample though

economies of scale and scope in the provision of diagnostic techniques and therapeutic services in portuguese hospitals this article analyses the provision of auxiliary clinical services that are typically carried out within the hospital we estimate a flexible cost function for three of the most important cost wise diagnostic techniques and therapeutic services in portuguese hospitals clinical pathology medical imaging and physical medicine and rehabilitation our objective in carrying out this estimation is the evaluation of economies of scale and scope in the provision of these services for all services we find evidence of economies of scale and some evidence of economies of scope we also find evidence of diminishing returns to management whereby larger hospitals appear to have surpassed their optimal size these results have important policy implications and can be related to the ongoing discussion of where and how should hospitals provide these services

costs efficiency and economies of scale and scope in the english higher education sector an understanding of the production and cost technology of higher education institutions is of considerable policy interest as it motivates the structure of the sector how large universities should be and what mix of outputs they should produce we review the literature and using data for english institutions in 2013 14 apply appropriate frontier methods to model the structure of costs in this diverse sector in doing so we uncover information about the returns to scale and scope within the higher education sector in particular the class of institutions comprising larger research intensive universities and small specialist institutions could benefit from further concentrating postgraduate and research activity we find that the universities comprising the english higher education sector are largely efficient measured relative to observed practices and that there is little scope for gains in technical efficiency from allocating resources on the basis of efficiency scores

product line deregulation and the cost structure of us savings and loan associations recent legislative actions restrict thrift powers which were broadened by deregulatory actions in the early 1980s using nationwide data for savings and loans s ls evidence is found that these restrictions may rise intermediation costs for s ls by limiting their ability to exploit economies of scope between mortgage related and other outputs in addition economies of scale for a wide size range of s ls are found evidence is also found to suggest that insolvent s ls have higher costs for the same level of outputs than solvent s ls

dynamic measures of scope and scale economies an application to german agriculture static concepts of multiproduct economies of scale and scope are extended into a dynamic setting within the cost of adjustment framework important properties of the dynamic measures are developed and the foundations of a dynamic theory of the firm generalizing static neoclassical theory are presented dynamic measures of scope and scale as well as shadow costs are estimated empirically for multiple output multiple input german dairy farms operating under a production quota causes of scope economies are explored and a conceptual model to predict the evolution of the production structure of german farms is formulated

effect of class size on economies of scale and marginal costs in higher education the impact of class size on economies of scale and marginal costs in higher education is examined a multiproduct translog cost function is estimated using data from a single university the results indicate that failure to control for class size may lead to biased estimates of economies of scale and relative marginal costs evidence of constant returns to scale for schools that expand output holding class size constant is found and increasing returns to scale if class size is allowed to expand the marginal cost of graduate students is found to be 4 3 to 8 98 times that of undergraduates

economies of scope in portuguese local government using an augmented hicks moorsteen approach whereas a substantial empirical literature has investigated scale economies in local government by contrast little effort has been directed at economies of scope to address this gap in the litera

informality over the life cycle abstract in developing countries informality is mainly concentrated among younger and older workers and low skilled workers in this study we propose a dual labor market theory that highlights how frictions and taxation in the formal sector and educational choices interact to shape the informality rate over the life cycle we develop a life cycle model with search frictions skill heterogeneities and endogenous educational choices we carry out a numerical analysis and show that our model reproduces remarkably well the life cycle patterns of informality non employment and formal employment in argentina we analyze several public policies and show that an educational grant reduces both informality and non employment and may be fully financed by the extra tax revenues generated by the increase in formal employment and wages lowering taxes may achieve similar results but is detrimental to the government budget despite increasing the base on which they are levied

market structure in the production of economics ph d s a century ago economics began to develop as a separate and significant part of the curriculum in american colleges and universities along with increased popularity and enrollment came the need for faculty specifically trained in economics a number of american scholars turned to europe germany in particular for their training and brought the german ph d back as a model for graduate education the first economics ph d s earned in this country were awarded by harvard 1875 yale 1877 and johns hopkins 1878 1 these first ph d s were two year degrees by 1900 economists had generally upgraded the ph d to three years beyond the baccalaureate degree consisting of two years of course work and another year for the dissertation graduate classes were taught in seminar format with considerable interaction between professors and students as the production process matured dissertations became longer more sophisticated and more specialized i e they were no longer the mark of a cultured gentleman but the demonstration of a professional skill 15 11 the newly formed american economic association began to keep track of doctoral candidates in economics in 1904 6 in 1904 there were 8 institutions which reported having men working on ph d s and by 1928 that number had increased to 27 2 while the american economic association did not tabulate the output of completed ph d s the national research council has compiled a database containing the number of ph d s by institution by year since 1920 their survey of earned doctorates indicates that 22 ph d s were awarded in economics by 6 different universities in 1920 by 1992 that number had grown to 910 ph d s from 123 different institutions

effective costs and chemical use in united states agricultural production using the environment as a free input a cost function based production model is used to represent patterns of input use and output production in u s agriculture and the implied costs of induced reductions in risk from agricultural chemicals bad outputs we estimate and evaluate shadow values for these harmful outputs and the implied input and output specific substitution patterns with a focus on the impacts on pesticide demand and its quality and quantity components using state level data we find these measures to be statistically significant vary substantively by region and imply increased demand for effective pesticides associated with improvements in quality from embodied technology copyright 2002 oxford university press

higher education costs and scale and scope economies higher education multi product cost functions are estimated for the public and private sectors disaggregated by research comprehensive baccalaureate and associate level institutions the output mix incorporates professional school teaching output in addition to undergraduate and graduate teaching and research outputs scale and scope economies are examined by sector and institutional level also accounting for regional differences ray economies are found throughout the private sector but confined to lower level public institutions research economies are widespread throughout all sector levels economies of scope prevail among private institutions across levels but only among comprehensive and baccalaureate public colleges

the bias due to omitting quality when estimating automobile demand the conclusions of policy oriented market studies often hinge upon the size of an estimated demand elasticity few of the researchers who have estimated such elasticities have utilized a variable designed to measure the subjective concept of quality if quality both significantly affects the demand for a heterogeneous good and is positively correlated with price omitting quality from a demand regression will lead to a downward bias in the estimated price elasticity using levinsohn s 1988 model of the automobile market as a framework this note shows that including quality variables can increase the model s estimated price elasticity by more than 80 percent copyright 1991 by mit press

an analysis of returns to scale in public production with an application to fire protection abstract this paper analyzes returns to scale in public production existing studies fail to differentiate among three dimensions of scale service quality the level of governmental activity and the number of people served a fourth dimension economies of scope is need for agencies that provide multiple services this paper provides a formal definition of returns to scale for each dimension this framework is applied to fire protection using a translog cost function with two services fire prevention and fire suppression the results indicate economies of scope increasing returns to quality scale and constant returns to population scale

calculating hedonic price indices with unobserved product attributes an application to the uk car market we show that hedonic price indices that omit model specific unobservable product attributes are subject to considerable bias we utilize a complete panel of new car versions marketed in the uk over 1971 98 which incorporates over 100 observable product characteristics sales weighting to capture the distribution of purchases across models and model specific fixed effects to account for unobservable characteristics we find that quality adjusted prices obtained from hedonic regressions that do not account for unobservable characteristics exhibit a severe downward bias we also show that quality adjusted prices exhibit distinct sub market differences having increased in mass production segments and decreased in specialized niches

decoupling recoupling and oil shock abstract since the early 1980s it has been believed that structural economic change inside oecd countries has produced an energy economic system that can resist all attempts by oil exporters to impose higher prices the structural change termed decoupling is expressed by slow or negative oil consumption growth while gdp continues to progress however since 1984 86 major long cyclic trends have begun to first slow then reverse the macroeconomic tendencies that were assumed to be structural oil consumption growth is now more closely related to economic growth in the oecd thus returning to the worldwide trend of closely coupled energy economic relationships opec after a difficult period 1984 87 has achieved greater internal cohesion and has greatly increased the scope and durability of production and export coordination with non opec developing country oil exporters it is therefore certain that oil prices will continue their recent progression the only preventative available to oecd countries is another recession similar to that of 1981 82

a reconsideration of hedonic price indexes with an application to pc s this paper compares hedonic to matched model indexes matched model indexes are averages of the price changes of goods that remain on sampled stores shelves since goods that disappear tend to have falling market values matched model indexes select from the right tail of price changes the bls can construct hedonic indexes that correct for this selection and are justified by standard arguments in an empirical study of pc s hedonics produce sharp price declines while matched model indexes are near zero also though there are modifications to hedonics that seem desirable they are not those in current use

analysis of trends in technical and allocative efficiency an application to texas public school districts abstract we present a new dea based method to analyze efficiency trends over time and differences across subgroups in a panel data setting we employ a result that the aggregate technical and allocative inefficiency score equals the technical inefficiency when input quantities are aggregated into a single total input cost variable and develop test procedures to evaluate the presence of allocative inefficiency we apply these methods to test for the presence of allocative inefficiency in texas school districts over 1993 99 and analyze shifts and trends in both technical and allocative inefficiencies over time for different regions our empirical results indicate the existence of statistically significant allocative inefficiencies while technical inefficiency increased over the six year sample period allocative inefficiency remained relatively stable during this period these results for the full sample obtain also when we repeat the analysis for different regions

analysis of hospital production an output index approach in this study a new model of hospital costs is developed and estimated utilizing an output index this theoretically appropriate output index is constructed to accurately reflect the differentiated nature of hospital care by employing both patient and diagnosis characteristics in its construction using this output index we estimate a long run translog cost function with a dataset of 321 california hospitals for the year 2003 we find evidence of economies of scope across specialties within primary care and evidence of scope diseconomies within secondary and tertiary care point estimates of scale economies using the output index indicate that minimum efficient scale is reached at a larger level than when using less refined output measurement techniques that have often been used in similar studies our estimates indicate the importance of accounting for specialty specific scope economies when analyzing the production properties of firms producing differentiated products

inter firm differences in fed cattle prices in the southern plains pooled cross section time series data were used to assess inter firm differences in fed cattle prices paid by southern plains meatpackers during june 1989 significant price differences were found among packers even after accounting for numerous factors affecting fed cattle value some buyers paid higher prices and some lower prices than did one of the three largest packers as a group the big three firms paid lower prices than did smaller firms both in the southern plains as a whole and in three of its subregions

subject mix and productivity in portuguese universities abstract recent changes in higher education especially associated with its massification have led to calls for more accountability and to an increasing need to evaluate universities performance however comparing universities with different subject mixes poses some significant problems in this article a linear mixed effect model methodology allowing for random effects at university level is used to measure the productivity of portuguese public universities taking into account their subject composition for a period of five years 1997 2001 the results show that subject mix is an important factor in explaining the variability in productivity between universities however even taking account of subject mix a lot of inefficiency is found in the system and a significant variability in productivity among universities exists

market and cost structure in the u s beef packing industry a plant level analysis a resurgence of consolidation in the u s meat packing industry in the past few decades has stimulated academic and policy debate issues raised include the role of cost economies in driving these patterns and the effects on the agricultural sector cattle producers from market power here plant level cost and revenue data for u s beef packing plants are used to estimate a cost based model incorporating cattle and output market pricing behavior the robust results indicate little market power exploitation in either the cattle input or beef output markets and that any apparent evidence is counteracted by cost efficiencies such as utilization and scope economies copyright 2001 oxford university press

an option perspective on generating and maintaining plant variety rights in china notwithstanding the ambiguous research and productivity promoting effects of plant variety protections pvps even in developed countries many developing countries have adopted pvps in the past few years in part to comply with their trade related aspects of intellectual property rights trips obligations seeking and maintaining pvps reserves options to an expected revenue stream from the future sale of protected varieties the value of which varies for a host of reasons in this article we empirically examine the pattern of pvp applications in china since its pvp laws were first introduced in 1997 we place those pvp rights in the context of china s present and likely future seed markets to identify the economic incentives and institutional influences on decisions to develop and apply for varietal rights

technology labor wars and producer dynamics explaining consolidation in beefpacking beefpacking underwent a dramatic transformation in the 1970s and 1980s as plants got much larger and industry concentration rose dramatically we use individual census bureau plant records to analyze the sources of the transformation we find that there were modest but extensive scale economies in packing plants covering the full range of plant sizes and that such economies became more important throughout the period of the study as production shifted to larger plants we estimate that the industry s aggregate processing costs fell by 35 3 by 2002 compared to what they would have been without consolidation

hedonic prices for cars an application to the spanish car market 1981 2005 in this article we provide a comparison of different formulations for hedonic regression analysis in order to construct a quality adjusted price index for the spanish car market over the period 1981 to 2005 specifically we address the issue of instability of coefficients over time and propose two alternative estimation procedures based firstly on a moving sample of observations and secondly on a moving average of estimated coefficients in single period equations the statistical tests applied support the proposed methodologies on empirical grounds two conclusions can be emphasized firstly our study concludes that taking quality changes into account car prices in spain deflated by consumer price index cpi declined by 40 between 1981 and 2005 this result is robust to the alternative estimation procedures employed in the study secondly an analysis of convergence shows that for quality adjusted prices a clear trend in convergence emerges between 1986 and 1992 whereas such a trend does n

efficiency in the provision of university teaching and research an empirical analysis of uk universities summary 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

behavioural differences among hospitals it is ownership or location by about 1988 the consensus among leading health economists was that no meaningful differences existed among hospitals of differences owernership form and this position was embraced by the antitrust division of the us department of justice but behavioural differences among hospitals of different among hospitals of different owernership has continued to be a matter of both academic and judicial interest recent empirical studies have concluded that real differences do exist while many earlier studies reached the opposite conclusion this contradiction in finding over time as competition intensified is exactly opposite to what expense preference theory would predict we examine this apparent paradox using a very general test of behavioural differences by hospital ownership we find that the omission of location specific variables can lead to biased estimates of ownership effects and that no significant behavioural differences exist among private california hospitals in 1986 90 when this source of o

nonparametric analysis of returns to scale in the us hospital industry this paper presents new estimates of scale economies for us hospitals we show that the common translog specification of hospital costs is a misspecification and employ nonparametric local linear estimation with both continuous and discrete covariates a bootstrap method is used to provide inferences regarding ray scale economies and expansion path scale economies for a large sample of hospitals covering 1984 1996 we find evidence of changes in the structure of hospital costs over the sample period as well as evidence of locally optimal hospital sizes copyright 2004 john wiley sons ltd

finite mixture estimation of multiproduct cost functions this paper presents a technique of cost function estimation based on the theory of finite mixture distributions which allows for the simultaneous existence of multiple technologies of production when the researcher does not know which observations correspond to which technologies the finite mixture technique provides estimates of the proportions of firms using the various technologies facilitates comparisons between technologies and preserves the traditional interpretations of cost estimation after describing the mixture procedure the technique is illustrated on a large sample of savings and loan associations and it is concluded that this industry exhibits multiple technologies of production copyright 1991 by mit press

state regulation and university behavior abstract the impact of state regulation on the economic behavior of american public research universities is studied using a unique sample of data on costs outputs and regulation measures for 98 institutions the university cost structure is modeled by a multiple output translog cost function explicitly allowing for the impact of state regulation regulating non faculty salary expenditures and the spending of non state revenues decreases costs while regulating faculty salary expenditures increases costs given the same output levels the results are interpreted in terms of the principal agent relationship of state regulators and universities efficiency gains and losses depend on the relative accuracy of state information on the production process

quality and economies of scale in higher education this study attempts to develop and empirically estimate an average cost and output reltion for average total for higher education statistical results based on data for top phd granting institutions suggest there are economies of scale in higher education academic reputation is also an important variable in explaining variations in average total cost

estimating the degree of market power in the beef packing industry a technique for assessing the degree of monopoly power developed by appelbaum 1979 1982 is extended here to permit measurement of monopsony power as well data from the u s beef packing industry are examined the results reveal small but statistically significant monopoly monopsony price distortions in slaughter cattle and wholesale beef markets but in spite of a recent trend toward heightened concentration in the industry give no indication that performance has become appreciably less competitive of late this abstract was borrowed from another version of this item

the supply of university enrollments university administrators as utility maximizing bureaucrats the supply of enrollments in higher education has receivedrelatively little attention in both theoretical and empiricaleconomic research to address this we formulate and test amodel of the supply of enrollments in higher education inwhich administrators are modeled as utility maximizingbureaucrats we find evidence that individual presidents andprovosts have a significant effect on enrollment supply andfaculty demand in a panel of eleven public colleges anduniversities in maryland from 1988 to 1996 implying thatinstitutions have enough market power to permit thepreferences of administrators to influence enrollment supplyand faculty demand

the effect of competition on the efficiency of secondary schools in england abstract in this paper we calculate the technical efficiencies based upon multiple outputs school exam performance and attendance rates of all secondary schools in england over the period 1993 1998 we then estimate models to examine the determinants of efficiency in a particular year and the determinants of the change in efficiency over the period our results suggest that the greater the degree of competition between schools the more efficient they are the strength of this effect has also increased over time which is consistent with the evolution of the quasi market in secondary education competition is also found to be an important determinant of the change in efficiency over time there is however some evidence of conditional convergence between schools

economies of scale and scope and the economic efficiency of china s agricultural research system this article investigates economies of scale and scope and other potential sources of improvements in the economic efficiency of china s crop breeding an industry at the heart of the nation s food economy using data covering 46 wheatand maize breeding institutes from 1981 to 2000 we estimate cost functions for the production of new varieties at china s wheat and maize breeding institutes our results indicate strong economies of scale along with small to moderate economies of scope related to the joint production of new wheat and maize varieties cost efficiency increases significantly with increases in the breeders educational status and with increases in access to genetic materials from outside the institute

economies of scale and scope in flemish secondary schools this study estimates a multiproduct translog cost function for the entire population of 1011 flemish secondary schools in order to determine the degree of ray and product specific dis economies of scale as well as the degree of dis economies of scope three types of schools and seven major study fields can be distinguished student loads in these study fields are used as outputs produced by the schools evidence is found for ray economies of scale for the three types of schools even at output levels of 300 of the actual means although the cost elasticities of six out of seven outputs are close to zero most of the values indicating the degree of product specific economies of scale are negative suggesting diseconomies of scale however this can be explained by the considerable scope effects which are incorporated in the definition of the product specific economies of scale

external debt and oil prices some prospects for oil exporting developing countries abstract this article examines the extent to which selected oil exporting developing countries can continue to depend on their major source of hard currency earnings to service their external debt in particular and to promote the process of future economic growth in general the four countries under consideration are ecuador egypt indonesia and nigeria incorporated into the study are alternative sets of assumptions regarding future oil output export potential future oil prices external debt levels and future interest rates both the effects of the recently formulated baker plan and the collapse of oil prices are examined within this context

an economic analysis of technology in the meat products industry the meat products industry underwent significant structural change during the last two decades the relocation and expansion of commercial cattle feeding stimulated development of new single species slaughtering facilities to replace older multi species plants an essentially new processing industry arose specializing in breaking and packaging carcasses this forward integration has significantly changed distribution methods of slaughtering and fabricating firms increased emphasis on coordination of inputs led to interest in backward integration from packing into cattle feeding the steer and heifer slaughtering sector which was decentralized and competitive in the 1950s has turned toward centralization and concentration although the largest firm accounted for only 13 of total u s steer and heifer slaughter in 1977 it had more than doubled its share since 1970 in 1978 this firm slaughtered more than twice as many steers and heifers as its nearest competitor in addi

new estimates of economies of scale and scope in higher education 1 introductionthe substantially greater than inflation increases in college tuition during the late 1980s and first half of the 1990s ignited considerable discussion of the costs of higher education by both academics and nonacademics the general discussion covered such issues as how much tuition has risen why college costs so much ehrenberg 2000 the extent to which tuition fully covers costs winston 1998 nacubo 2002 and what colleges are doing to cut costs strosnider 1998 indeed concern over rapidly increasing tuition spurred congress to establish a national commission on the cost of higher education in 1997 the commission conducted a review of college costs and issued recommendations for holding costs down to economists discussion of cost cutting generally boils down to a simple question what is the efficient organization of production in a market economy competitive pressures force profit maximizing firms constantly to strive to produce more efficiently thus information about the efficient organization of production can be deduced by observing organizations that survive and prosper stigler 1958 however in the context of higher education the answer is not so simple for at least three reasons i colleges are not profit maximizing entities thus market driven pressures to minimize costs are essentially absent relatedly ii tuition prices paid by students customers do not cover the full cost of their educational experience winston 1998 and iii colleges typically produce multiple products not just undergraduate education supposing that the individuals who run institutes of higher education ihes have an interest in minimizing costs how should they structure production to achieve this that is what should they produce and how much of it should be produced should colleges specialize and produce only undergraduate education or produce multiple outputs as so many currently do should colleges be small or large in terms of student enrollments and or grant research these are complex questions in their own right for example take the question about the optimal mix of outputs to produce forgetting about the implications for revenues there are a host of related empirical issues to investigate what are the unit costs of producing different levels of only undergraduate education graduate education athletics research extension or public services what then in comparison are the unit costs of producing different levels of alternative combinations of two or more of these outputs knowing the answers to specific questions like these provides an essential foundation for informed decision making about the efficient organization of production in higher education estimating the cost of producing academic outputs is complicated by the fact that many if not most ihes produce multiple products typically the products include undergraduate and or graduate instruction and research 1 in addition to these basic outputs the state land grant institutions also produce extension services many institutions also produce public services such as medical services business assistance programs museums of various sorts theater productions and the like and of course ihes produce both intramural and extramural athletics thus for purposes of estimating unit costs it is essential to treat ihes as multiproduct firms further it seems highly likely that the production of certain outputs affects the unit cost of producing others for example production of graduate instruction requires the administrators of an ihe to hire faculty with more extensive training and ability than is required to teach at the undergraduate level doctorally qualified faculty are more expensive to hire than non doctorally qualified faculty ceteris paribus to the extent that the set of faculty providing graduate instruction and the set of faculty providing undergraduate instruction are mutually exclusive the provision of the former has no cost spillover to the latter

diversification economies and specialisation efficiencies in a mixed food and coffee smallholder farming system in papua new guinea smallholder farming systems in papua new guinea are characterised by an integrated set of cash cropping and subsistence food cropping activities in the highlands provinces the subsistence food crop sub system is dominated by sweet potato production coffee dominates the cash cropping sub system but a limited number of food crops are also grown for cash sale the dynamics between sub systems can influence the scope for complementarity between and technical efficiency of their operations especially in light of the seasonality of demand for household labour and management inputs within the farming system a crucial element of these dynamic processes is diversification into commercial agricultural production which can influence factor productivity and the efficiency of crop production where smallholders maintain a strong production base in subsistence foods in this study we use survey data from households engaged in coffee and food crop production in the benabena district of eastern highlands province to derive technical efficiency indices for each household over two years a stochastic input distance function approach is used to establish whether diversification economies exist and whether specialisation in coffee subsistence food or cash food production significantly influences technical efficiency on the sampled smallholdings diversification economies are weakly evident between subsistence food production and both coffee and cash food production but diseconomies of diversification are discerned between coffee and cash food production a number of factors are tested for their effects on technical efficiency significant technical efficiency gains are made from diversification among broad cropping enterprises

payment source and the cost of hospital care evidence from a multiproduct cost function with multiple payers abstract this study investigates the capacity of hospitals to vary the intensity of their services based on patients expected sources of payment while the concept of price discrimination by hospitals based on payer generosity cost shifting has been discussed extensively the notion that hospitals can adjust payer specific marginal costs to reflect differences in reimbursement policies has not been studied in depth to examine this issue this analysis employs a multiproduct cost function with hospital outputs defined as admissions by payment source controlling for the distribution and severity of illness casemix for each payer marginal costs of casemix adjusted discharges are obtained and compared for medicare medicaid private payers and a residual category that includes uncompensated care we find that indeed payer specific marginal costs generally reflect payer generosity

financial structure production and productivity evidence from the u s food manufacturing industry this study integrates production and financing to examine the impacts of financial structure change on the production profitability and productivity growth in the u s food manufacturing industry empirical results show that during the period covered by this study agency cost associated with increased debt use by this industry negatively affected its output growth input demand profitability and overall productivity growth dividend payment positively contributed to the production and performance of this industry via signaling benefit however the negative effects of increased debt use by this industry far outweighed the positive contribution of dividend payment the u s food industry achieved a 0 9 average annual productivity growth which came primarily from technological progress and capital adjustment the rapid increase in debt use by this industry was responsible for slowing down the pace of productivity growth via its negative contribution to the total factor productivity growth capital expansion was the principal driver of output growth and profitability in this industry

the production characteristics of local public education a multiple product and input analysis since the seminal work of baumol panzer and willig 1 economists have become increasingly interested in incorporating the multifaceted nature of real world production functions into their empirical analyses multiproducts multiple inputs and the relaxation of the long run equilibrium condition are some prime examples of major innovations in production modeling an excellent example of this innovative literature is the study by cowing and holtmann 7 that focuses on the short run production characteristics associated with the hospital services industry specifically cowing and holtmann find evidence contrary to long run equilibrium and that economies of scope are at least as important as economies of scale in the production of hospital services moreover several empirical studies relating to the production characteristics of other goods and services such as higher education 6 crime prevention 9 electric utilities 15 and airlines 5 have provided ample evidence that these pertinent factors matter from both an econometric and a policy perspective the literature concerning the production characteristics of primary and secondary education however has lagged behind in terms of incorporating more realism into the analysis typically studies concerned with primary and secondary education production 2 3 13 14 maintain that schools operate at a long run equilibrium position and produce a single output with a single input i e teachers thus assuming away factors which these other industry studies have found to be significant in fact jimenez 12 is the only study to date on local primary and secondary education production that is based on less restrictive assumptions several limitations are associated with his research however each of these limitations reduce the generality of his findings concerning the production characteristics of primary and secondary education first jimenez employs a small sample to obtain estimates of various production characteristics bringing into question the overall

size democracy and the economic costs of running the political system the search for the optimal size of political systems is one of the most enduring in political thought given the validity of arguments for and against small units one might expect variation in rearrangements of unit sizes however the reform trend is uniform units often at the local level are amalgamated to harvest scale effects the purpose of this article is to evaluate the argument on economies of scale in the economic costs of running political systems our testing ground is a recent danish reform it allows us to avoid endogeneity problems often facing researchers of size reforms the reform was directed by the central government and constitutes an exogenous shock to 239 municipalities whereas 32 municipalities were left untouched we thus have a quasi experiment with pre and posttreatment observations for both an experiment and a control group our findings show that scale effects measured as administrative costs per inhabitant are considerable

the impact of degree programmes on university expenditure this research examines the impact of the number and mix of academic degree programmes on university operating expenditure in the united states statistical results are based on data for doctoral and research institutions without medical schools after controlling for other factors influencing expenditure additional degree programmes are associated with significant increases in expenditure with doctoral programmes having a 40 higher marginal impact on total expenditure than baccalaureate programmes most institutions are found to be smaller than the expenditure minimizing size and to have higher expenditure per full time equivalent student as specified the models explain a large amount of the variation in expenditure across the institutions

program duplication in higher education is not necessarily bad abstract public systems of higher education have recently attempted to cut costs by providing financial incentives to cut duplicated programs i e programs that are offered at different institutions we study the profit and welfare effects of reducing program duplication against the background of a funding system reform in flanders belgium we find that dropping duplicated programs at individual institutions tends to be socially undesirable due to the students low willingness to travel to other institutions and to the limited fixed cost and variable cost savings furthermore we find that the financial incentives offered to drop programs may be very ineffective leading to both undesirable reform and undesirable status quo these findings emphasize the complexities in regulating product diversity in higher education and serve as a word of caution towards the various decentralized financial incentive schemes that have recently been introduced

productive and financial performance in u s manufacturing industries an integrated structural approach in the last few years macroeconomists and industrial organization researchers have reexamined relationships among scale economies markups economic profitability and productivity growth paul romer 14 has emphasized the importance of increasing returns for productivity growth at the aggregate industry or economy level empirical evidence supporting this at the industry level has been presented by robert hall 4 5 who reported both significant increasing returns and markups of price over marginal cost in various u s manufacturing sectors related evidence on the cyclical nature of markups in these industries suggesting some procyclicality of markup behavior has been presented by domowitz hubbard and petersen 3 analysis of the cyclical characteristics of robert solow s 16 productivity residual provided the basis for these empirical studies the resulting framework is limited however by its dependence on a number of restrictive assumptions which severely hamper analysis of interactions among these characteristics the purpose of this paper is to extend this type of analysis to consider profit maximizing markups economic profitability scale economies capacity utilization and productivity growth within an integrated theoretical structural model and to assess their interactions empirically for two digit u s manufacturing data more specifically using the new industrial economics approach outlined by timothy bresnahan 2 in which marginal cost and therefore markups are unobserved but estimated econometrically i specify an integrated cost and demand structure for each industry the structure is quite general in that i markups and returns to scale are permitted to vary over time they are not constant parameters ii shortand long run impacts are distinguished by explicit recognition of adjustment costs iii quasi fixity of both capital and labor is incorporated to accommodate labor hoarding as well as slow adjustment of capital iv input substitution is not constrained a priori a generalized leontief restricted cost function based on gross output is employed v nonstatic expectations are allowed for through an instrumental variable estimation procedure and vi the effects of cost and demand shocks are directly represented by specifying and estimating industry specific cost output demand and input demand functions

government free riding in the public provision of higher education panel data estimates of possible crowding out this article employs panel data on more than 1000 us public colleges and universities to investigate the effect of private giving on state government funding government free riding is at question and is found to be active in that private donations partially displace state government funding at the rate of 83 cents on the dollar that compares to the 45 cents political substitution of the 1960s but is much diminished from the 1 07 of the 1980s those are aggregate comparisons for all public institutions a disaggregated approach in this article additionally reveals that doctoral granting research universities are somewhat lesser victims of crowd out in experiencing a 71 cents cut at master level colleges and universities and associate 2 year degree granting colleges crowding out is estimated to be on the order 87 cents and 1 10 respectively relative to the academic year 2000 to 2001 publicly controlled colleges and universities are found to experience significant reductions in state appropriated fu