fishing effort its testing specification and internal structure in fisheries economics and management abstract the concept of fishing effort is central to fisheries economics and management however effort is an aggregate index of inputs which can be consistently formed only under the condition on production technology of homothetic separability of inputs this paper develops the conditions under which effort can be consistently formed it then provides the first empirical test for effort and jointness in inputs in a fishery by estimating a multiproduct function for the new england otter trawl fleet after not rejecting input output separability and rejecting nonjointness in inputs the construction of a superlative index for effort is demonstrated through estimating a translog production function the implications of effort s internal structure for fisheries management are then considered

capacity utilization under regulatory constraints this paper presents a methodology for predicting the effect of quota type regulatory constraints on capacity utilization for a multiproduct profit maximizing firm the approach builds on recent advances in the use of virtual prices to model the effects of rationing this allows the effects of regulatory constraints to be examined ex ante the methodol ogy is illustrated through a case study of the imposition of output quotas in an open access marine fishing industry on the pacific coast of the united states the results suggest that for certain species output quotas can cause strong disinvestment incentives have been used for many years to analyze the current status of the economy the expansion ary or contractionary forces on investment and inflation and productivity movements tradi tional cu measures were based on the notion of maximum possible output recently economists have developed measures derived from the eco nomic theory of the firm and based instead on a notion of optimal output berndt and fuss 1986 hickman 1964 klein 1960 morrison 1985 1988 segerson and squires 1990a these measures assume that some inputs are quasi fixed and that capacity utilization is determined by the level of the quasi fixed input s relative to the level of output previous studies of theory based cu measures have generally assumed that the industry under study was free from regulatory constraints an exception is morrison s 1988 study which ana lyzed among other things the effect of pollution control regulations on capacity utiliza tion in the u s and canadian steel industries the analysis is retrospective however since it studied the impacts of regulations that were al ready in effect in many cases it would be useful to be able to predict the effect of proposed regulations on ca pacity utilization such prospective or ex ante analysis would provide regulators with useful information regarding the likely effect of alterna tive policies on investment incentives for exam ple regulatory production limits on a single product such as quotas may cause multiproduct firms to change the volume and mix of their production which could in turn change invest ment incentives 1 likewise input use restrictions could affect both output supplies and the de mands for unregulated inputs thereby altering investment incentives predictions of these changes would contribute to designing more ef fective public policies regulating capacity and in vestment

a spatial model of international conflict 1 he model presented here assumes that nations initiate conflict to change the international status quo across one or more issues to an outcome they prefer their preferences for different issue outcomes are represented by a classical spatial utility function international coalitions are formed both to enhance the chance of a successful challenge and to counter existing challenges disputes are modeled as periods of competition between two coalitions through the recruitment of additional members erosion of support for the opposing coalition and escalation of the crisis the two nation model is analyzed in detail and the existence of the core for the resulting game is proved the two main conclusions of the two nation model are that nations have a general incentive to exaggerate their issue positions in disputes and that the possibility of issue trades enhances the likelihood of compromise because scientific understanding arises from theories the explication of theories is essential for the development of scientific understanding to understand international conflictthat is the resolution of disputes between nations by coercion or the threat of coercion a theory that can explain such conflict is needed this paper will present a model drawn from rational choice theory specifically game theory that explains national actions in conflicts as strategic choices made in order to gain preferred resolutions of the international issues in dispute compared to existing game theory models of international conflict the model presented here provides an explicit description of how each nation s evaluation of the issues in dispute affects its desire to pursue compromise or conflict a more detailed sequence of escalation allowing for the detailed study of escalation strategies and a framework that can explain the timing and extent of third party interventions into ongoing crises

primal and dual capacity utilization an application to productivity measurement in the u s automobile industry capacity utilization measures have traditionally been constructed as indexes of actual as compared to potential output this potential or capacity output y can be represented within an economic model of the firm as the tangency between the short and long run average cost curves economic theoretical measures of capacity utilization cu can then be characterized as y y where y is the realized level of output these quantity or primal cu measures allow for economic interpretation they provide explicit inference as to how changes in exogenous variables affect cu additional information for analyzing deviations from capacity production can be obtained by assessing the dual cost of the gap in this article the definitions and representations of primal output and dual cost cu measures are formalized within a dynamic model of a monopolistic firm as an illustration of this approach to characterizing cu measures a model is estimated for the u s automobile industry 1959 1980 and primal and dual cu

product mixes as objects of choice in non parametric efficiency measurement abstract non radial measures of technical efficiency essentially differ from their radial counterparts in that the product mix of the efficient reference is allowed to be different from the product mix of the evaluated observation whereas existing non radial measures are still based on the product mix of the evaluated i e possibly inefficient observation we change the perspective and propose a measure based on the mix properties of the efficient reference the resulting inverse measure can be considered as complementary to the fare lovell or russell efficiency measure

estimating output allocative efficiency and productivity change application to japanese banks abstract a new measure of output allocative efficiency is developed by comparing the input technical efficiency of a firm for the direct input requirement set and the indirect input requirement set proposed by shephard indirect production functions verlag anton hain meisenheim am glan the ratio of the direct and indirect input quasi distance functions serves as the measure of output allocative efficiency as such it measures the ratio of potential to actual inputs if the firm had chosen the revenue maximizing output mix using panel data on japanese banks operating during 1992 1996 productivity growth is measured and decomposed into changes in output allocative efficiency changes in input technical efficiency and technical change during the period japanese banks experienced productivity declines averaging 2 per year and could have used only 78 93 of actual inputs if they had chosen the revenue maximizing output mix

firm behavior under quantity controls the theory of virtual quantities the theory of virtual quantities the dual to virtual prices provides a framework to analyze competitive multiproduct firm behavior under multiple quantity controls on inputs and outputs including command and control quotas and transferable property rights the framework addresses the firm s reactions to regulatory controls impacts of adding or dropping quantity controls inferring unrationed from rationed production and conversion from command and control quotas to cap and trade systems with transferable property rights and secondary market behavior the paper develops reasons for failure of quasi concavity of technology extends the elasticity of intensity s properties and integrates the virtual price and virtual quantity frameworks virtual quantities are applied to assess potential firm responses to quantity controls and a potential transferable property right in a malaysian fishery

excess capacity and asymmetric information in developing country fisheries the malaysian purse seine fishery excess capacity poses a problem in many developing country fisheries these countries often pursue a development strategy aimed at expanding capacity under open access sustainable development however requires management principal agent issues from asymmetric information between the regulator and fishers which potentially form serious obstacles to fisheries management arise in the likely forms of management this article discusses principal agent issues and examines the principal agent moral hazard issue which is due to divorce of ownership and vessel operations the article also illustrates a method for estimating capacity when information is limited the peninsular malaysian purse seine fishery forms a case study

the expected utility theory of conflict measuring theoretical progress we examine the progressivity of bruce bueno de mesquita s theory of conflict as originally developed in the war trap and as extended later bueno de mesquita offers the progressivity of the expected utility theory relative to other theories and approaches to conflict as his major defense in responding to critics bueno de mesquita essentially relies on imre lakatos definition of theoretical progress in presenting his argument a review of the literature addressing the concept of theoretical progress indicates that bueno de mesquita s application of lakatosian criteria is incomplete and that lakatos criteria are themselves flawed we review the philosophy of science literature dealing with theoretical progress or rational criteria for theory choice and evaluate the progressivity of the expected utility theory of conflict in light of criteria other than lakatos while we do recommend further elaboration of bueno de mesquita s theory we do not find it more progressive than its rivals

measuring economic efficiency with incomplete price information with an application to european commercial banks measuring economic efficiency requires complete price information while resorting to technical efficiency exclusively does not allow one to utilise any price information in most studies at least some information on the prices is available from theory or practical knowledge of the industry under evaluation in this paper we extend the theory of efficiency measurement to accommodate incomplete price information by deriving upper and lower bounds for farrell s overall economic efficiency the bounds typically give a better approximation for economic efficiency than technical efficiency measures that use no price data whatsoever from an operational point of view we derive new data envelopment analysis dea models for computing these bounds using standard linear programming the practical application of these estimators is illustrated with an empirical application to large european union commercial banks

minimum information management in fisheries this paper deals with problems of optimal management of common property fisheries it advances the proposition that many fisheries management schemes which are theoretically capable of generating efficiency are actually not practicable owing to their huge informational requirements this applies for instance to management by means of corrective taxes subsidies the paper proceeds to show that there exists under fairly unrestrictive conditions market based management systems that require minimal information for their operation but lead nevertheless to efficiency in common property fisheries one such system is the individual transferable share quota system

capacity utilization measures underlying economic theory and an alternative approach measures of industrial capacity utilization hereafter cu have been used extensively in helping to explain changes in the rate of investment labor productivity and inflation the cu measures have also been used to obtain indices of capital in use as distinct from capital stock in place a number of alternative measures of cu are periodically calculated and published the 1980 economic report of the president for example contains three series that by the federal reserve board the u s department of commerce bureau of economic analysis and the wharton school of finance other publicly available series are those prepared by mcgraw hill publishing company the u s department of commerce bureau of the census and rinfret boston associates inc although a host of cu measures is publicly available it is not at all clear how one should interpret changes over time in each measure or variations among them a principal reason underlying these interpretation problems is that the crucial link between underlying economic theory and the constructed measure of cu is weak one way in which this issue has manifested itself in the policy domain over the last five years has been with respect to the uncertain effects of dramatic increases in energy prices on capacity output and on cu each of the cu measures noted above is computed in such a way that explicitly ignores any role for energy prices yet several times during the last decade though growth to apparently high rates of cu had taken place investment and average labor productivity were much lower than expected and the rate of price increase much greater in brief during the last decade the explanatory power of alternative cu measures has dropped sharply some have conjectured that post opec energy price increases may have brought about major changes in the u s economy so that old quantitative relationships between measured cu and investment labor productivity and price inflation may have been altered substantially in order to assess effects of changes in pe on cu a re examination of the notion and measurement of cu is needed based on the framework of the economic theory of the firm that is the focus of this paper

transfer function estimation of trade leakages generated by court rulings in the hawai i longline fishery under the endangered species act esa mandate to protect turtle stocks from incidental contact the emergency interim rule of august 2000 prohibited hawai i permit holders from targeting swordfish in the area from the equator to 28 n and between 173 e and 137 w as a result of this interim rule landings of swordfish in hawai i decreased 93 in 2001 this paper implements a transfer function analysis to measure trade leakages generated by this ruling this case study for the hawai i fishery measures the limitations of the esa when enforcement has jurisdiction on some producers but not others

rent capture in a rights based fishery abstract the paper compares four methods of rent capture in a fishery managed with individual transferable quotas using simulations from a unit profit function some theoretical properties of a quota rental charge profit charge lump sum charge and an ad valorem royalty are examined and then compared in simulations in terms of the distribution of profits distortions to the fishery the relative burden on fishers and flexibility to adjust to changes in the fishery

on the measurement of capacity utilization capacity utilization is usually defined as the ratio of actual output to the output corresponding to 1 the minimum point on the short run average total cost curve and 2 the point of tangency between the long run average total cost and short run average total cost curves in practice however capacity utilization is often measured as the ratio of actual to the maximum potential output consistent with a given capital stock this paper demonstrates how to estimate the theoretical measures of capacity utilization and examines the correlation between three measures of capacity utilization and the mcgraw hill estimates of capacity utilization using data from a sample of u s privately owned electric utilities for 1961 83 copyright 1989 by blackwell publishing ltd

distributional consequences of fisheries regulations an empirical methodology for evaluating fisheries regulations in terms of both rent gains and employment losses is proposed a royalty tax and a change in catch distribution among competing vessel types are compared with the status quo of restricted access the case study is the british columbia commercial salmon fishery results suggest that rent gains associated with the alternatives are not always sufficient to compensate for losses in fishing income

economic inefficiency in a revenue setting the norwegian whitefish fishery the main focus in the inefficiency literature is on suboptimal input use and how this causes increased costs due to technical and allocative inefficiency production or cost functions are then typ

sustainable fisheries development in the tropics trawlers and licence limitation in malaysia sustainable fisheries development requires sound fisheries management area licence limitation programmes may form the cornerstone for most tropical multispecies fisheries management programmes an empirical analysis of peninsular malaysian fishing trawlers is used to design an area licence limitation programme that conforms to the multiproduct production technology and cost and revenue structures to best accommodate condtions of asymmetric information between the regulator and fishing vessels

productivity measurement in common property resource industries an application to the pacific coast trawl fishery this article measures total factor productivity in industries that exploit resources held in common particular attention is paid to the valuation and specification of in situ commonproperty resources in a neoclassical production technology catchability of the resource and variations in economic capacity utilization an empirical analysis of the open access pacific coast trawl fishing industry demonstrates that disentangling the productivity residual from changes in resource abundance its catchability and variations in capacity utilization hones the productivity residual to finer precision lowering mean productivity growth by about hak removing biological noise from highly variable resources is also important the results are related to aprogram limiting the number of vessels and can contribute to sustainable resource management whenever resources are held in common

non joint technologies the hypothesis of non jointness in input quantities separate production functions is well known and it plays an important role in many areas of economics in this paper we define three additional forms of non jointness which have received little or no attention in the literature and which might be relevant for the firm as well as for the representation of the aggregate technology we characterize all forms of non jointness in terms of variable profit and joint cost functions this yields a number of restrictions which are all testable empirically the assumption that production is non joint in input quantities separate production functions inputs allocated between the different production processes plays a crucial role in many areas of economic theory we need only think of international trade theory public finance macroeconomics growth theory or traded non traded good models of international finance in fact it is safe to say that more often than not production is assumed non joint in input quantities in multiple output models little work has been done to test the empirical validity of the assumption of non jointness in input quantities samuelson 1966 studies the characterization of non joint technologies in terms of the transformation function as pointed out by hall 1973 however samuelson s results do not seem very useful for econometric work hall studies the characterization of non jointness in input quantities in terms of the joint cost function this leads to a number of restrictions which can easily be imposed or tested for and which were used in empirical work by burgess 1976 and by kohli 1981 lau 1972 1978 finally characterizes non jointness in input quantities in terms of the profit function besides non jointness in input quantities lau also examines the case of non jointness in output quantities when an input can be cracked into several outputs in this paper we define two additional cases of non jointness and we characterize them in terms of the joint cost function and the variable or normalized restricted profit function the new forms of non jointness that we define may be useful to describe technologies at the level of the firm and may be even more so at the aggregate level some may be useful concepts in other areas of economics as well such as consumer theory by distinguishing between the various forms of non jointness one obtains a number of testable restrictions on the corresponding joint cost or variable profit functions

static efficiency decompositions and capacity utilisation integrating economic and technical capacity notions starting from existing static decompositions of overall economic efficiency on nonparametric production and cost frontiers this article proposes more comprehensive decompositions including several cost based notions of capacity utilization furthermore in case prices are lacking we develop additional decompositions of overall technical efficiency integrating a technical concept of capacity utilization these new efficiency decompositions provide a link between short and long run economic analysis and in empirical work avoid conflating inefficiency and differences in capacity utilization an empirical analysis using a monthly panel of chilean hydro electric power plants illustrates the potential of these decomposition proposals

estimation of the efficiency of structural funds a parametric and nonparametric approach this article seeks to perform an analysis of the efficiency of the application of the structural funds in the regions classified as objective 1 over the period 2000 to 2006 applying the techniques known as data envelopment analysis dea and stochastic frontier in the first place we are going to identify which are the most efficient regions finally we will analyse the extent to which certain factors have repercussions on the efficiency such as country geographical location and contribution of agriculture of gross domestic product gdp and the result indicates that some of these variables have significantly influences of technical efficiency

the war trap revisited a revised expected utility model the expected utility framework developed in the war trap is revised to correct several deficiencies risk taking orientations are now treated as an integral part of the model by introducing concavity or convexity into the utility functions the zero sum properties of the theory are largely eliminated and the tendency toward interpersonal comparisons of utility is removed several earlier results are replicated with the new model and with annual capabilities data new propositions are deduced that identify important limitations on conflict initiation and relationships resulting from differences in perceptions are tested support is found for the contention that the revised version of the theory of which the original model is a special case is a powerful tool for integrating many extant hypotheses about conflict and for explaining a substantial portion of the tendency for some threats to escalate to violence or warfare and for others to be resolved peacefully

investment and cash flow new evidence we study the investment cash flow sensitivities of u s firms from 1971 2009 our tests extend the literature in several key ways and provide strong evidence that cash flow explains investment beyond its correlation with q a dollar of current and prior year cash flow is associated with 0 63 of additional investment for firms that are the most likely to be constrained even after correcting for measurement error in q our results suggest that financing constraints and free cash flow problems are important for investment decisions

production quota in multiproduct pacific fisheries abstract assessing the individual firm s technology and costs in a multispecies fishery allows design of a more effective output quota prior to regulation by anticipating and controlling for the firm s regulation induced responses an empirical study of a pacific coast trawl fishery indicates that the firm s flexibility of product decision is tightly constrained by its technology and cost structure hence as the resource stock for the regulated species sablefish deteriorates and the trip quota progressively tightens the firm cannot sufficiently reorganize its product bundle to preclude increasingly large sablefish disposal this defeats the purpose of the production quota

technology and efficiency in a panel of italian dairy farms an sgm restricted cost function approach this article employs a short term specification of the symmetric generalised mcfadden sgm cost function capable of accommodating quasi fixed factors and variable returns temporary equilibrium and scale economies are investigated while maintaining the consistency of the estimated model with microeconomic theory and approximation properties it also makes use of a two step procedure to estimate first the technology parameters and then time varying efficiency at farm level no distributional assumptions are required on efficiency as we consider a fixed effect model a balanced panel of italian dairy farms during the years from 1980 to 1992 serves as the case study the results suggest a rigid productive structure during the pre and post quota period moreover italian milk producers are found to exhibit considerable excess capacity and rather low input technical efficiency

super efficiency dea in the presence of infeasibility it is well known that super efficiency data envelopment analysis dea approach can be infeasible under the condition of variable returns to scale vrs by extending of the work of chen 2005 the current study develops a two stage process for calculating super efficiency scores regardless whether the standard vrs super efficiency mode is feasible or not the proposed approach examines whether the standard vrs super efficiency dea model is infeasible when the model is feasible our approach yields super efficiency scores that are identical to those arising from the original model for efficient dmus that are infeasible under the super efficiency model our approach yields super efficiency scores that characterize input savings and or output surpluses the current study also shows that infeasibility may imply that an efficient dmu does not exhibit super efficiency in inputs or outputs when infeasibility occurs it can be necessary that i both inputs and outputs be decreased to reach the frontier formed by the remaining dmus under the input orientation and ii both inputs and outputs be increased to reach the frontier formed by the remaining dmus under the output orientation the newly developed approach is illustrated with numerical examples

measuring and decomposing firm s revenue and cost efficiency the russell measures revisited abstract overall inefficiency measurement and decomposition are important for firms facing a world of changing prices since the resultant loss has implications on managers decision making in this paper we draw attention to some problems within existing approaches to decompose overall inefficiency into its sources and propose new revenue and cost inefficiency measures based on the well known russell measures specifically the technical inefficiency component is calculated by the russell output input measure which is able to incorporate all sources of inefficiency corresponding to the output input side specifically output input slacks whereas allocative inefficiency is retrieved residually all our results are derived from a new fenchel mahler inequality using the theory of convex conjugates this paper has several implications in theory and practice from a theoretical point of view we establish a natural dual relationship between the revenue cost function and the russell output input measure despite the previous unsuccessful attempts in the literature to provide such duality result from a practical point of view we provide a way of decomposing revenue cost inefficiency into allocative inefficiency and a component that measures technical inefficiency in the sense of pareto contrasting with the usual approaches for decomposing revenue cost inefficiency such as those based on shephard s output input distance function and the directional output input distance function

fixed effect estimation of highly mobile production technologies we consider fixed effect estimation of a production function where inputs and outputs vary over time space and cross sectional unit we exploit variability in the spatial dimension to identify time varying individual effects without parametric assumptions on the effects while estimation is unbiased asymptotics along the spatial dimension allow estimation of robust standard errors and asymptotic normality of the marginal products also if inference on the estimates of the individual effects is warranted then spatial asymptotics provide asymptotic normality while precluding an incidental parameters problem caused by asymptotics along the time or crosssectional dimensions we apply our results to a production function of bottom trawler fishing vessels in the flatfish fisheries of the bering sea we find significant spatial variability of output catch which we exploit in estimation of a harvesting function we conclude that vessel individual effects did not change across the period 2002 to 2004 we apply the theory of ranking and selection to determine that individual effects are not statistically significant across vessels

investment cash flow sensitivity cannot be a good measure of financial constraints evidence from the time series abstract investment cash flow sensitivity has declined and disappeared even during the 2007 2009 credit crunch if one believes that financial constraints have not disappeared then investment cash flow sensitivity cannot be a good measure of financial constraints the decline and disappearance are robust to considerations of r d and cash reserves and across groups of firms the information content in cash flow regarding investment opportunities has declined but measurement error in tobin s q does not completely explain the patterns in investment cash flow sensitivity the decline and disappearance cannot be explained by changes in sample composition corporate governance or market power and remain a puzzle

a theory of yardstick competition in the typical regulatory scheme a franchised monopoly has little incentive to reduce costs this article proposes a mechanism in which the price the regulatedfirm receives depends on the costs of identical firms in equilibrium each firm chooses a socially efficient level of cost reduction the mechanism generalizes to cover heterogeneous firms with observable differences medicare s prospective reimbursement of hospitals by using diagnostically related groups is a scheme very similar to the one outlined here

the economic policy uncertainty and firm investment in australia this paper examines the impact of economic policy uncertainty epu on the australian firm investment activity we find a significant positive relationship between the epu and the firm investment o

reputation and efficiency a non parametric assessment of america s top rated mba programs abstract widely publicized reports of fresh mbas getting multiple job offers with six figure annual salaries leave a long lasting general impression about the high quality of selected business schools while such spectacular achievement in job placement rightly deserves recognition one should not lose sight of the resources expended in order to accomplish this result in this study we employ a measure of pareto koopmans global efficiency to evaluate the efficiency levels of the mba programs in business week s top rated list we compute input and output oriented radial and non radial efficiency measures for comparison among three tier groups the schools from a higher tier group on average are more efficient than those from lower tiers although variations in efficiency levels do occur within the same tier which exist over different measures of efficiency

measuring productivity growth under factor non substitution an application to us steam electric power generation utilities a theoretical framework is developed for decomposing partial factor productivity and measuring technical inefficiency when the underlying technology is characterized by factor non substitution with farrell s 1957 radial index of technical inefficiency being inappropriate in this case russell non radial indices are adapted to measure technical inefficiency in a leontief type model a system of factor demand equations with a regime specific technical inefficiency term is proposed and estimated allowing for dependence across inputs using a copula approach then the paper presents a complete decomposition of partial factor productivity changes using a dataset of us steam power electric generation utilities

estimating substitution and expansion effects using a profit function framework this study reports a first attempt to derive all the relevant information with respect to the structure of production of an industry using knowledge of only a profit function using estimates of a profit function for canadian agriculture a procedure to separate substitution and expansion effects for both inputs and outputs was implemented information concerning net input and output substitution and complementarity possibilities were obtained the most important empirical results suggest that the hypothesis of nonjoint production of crop and animal outputs in canadian agriculture cannot be rejected and that hired and operator labor are complements rather than substitutes

multiple input multiple output production choices and technology in the u s wheat region duality theory motivates a translog expected profit function consistent with multiple products price uncertainty preseason climate constraints acreage control policies and possibly nonhomothetic technology although multiple outputs are allowed enterprise specific data is not necessary instead time series measures of output revenues and expected prices input expenses and prices and fixed input flows are employed appropriate measures of elasticities of choice returns to size and biases in technological change are derived results indicated decreasing returns to size rather limited though complementary responsiveness of choices to price changes and the nature of biases in technological changes

total factor productivity change in the new england groundfish fishery 1964 1993 abstract we develop estimates of total factor productivity tfp change in the new england groundfish fishery from 1964 to 1993 using a procedure similar to squires 1992 rand j econom 23 2 221 236 method which extends standard tfp measurement by including the effect of fluctuations in stock abundance the results indicate that tfp increased on average by 4 4 per year from 1964 to 1993 a higher average rate of increase occurred between 1964 and 1982 possibly due to new technologies e g fishfinders tfp declined at 0 33 annually from 1983 to 1993 due to stringent output and effort control measures

transferable quotas enforcement costs and typical firms an empirical application to the norwegian trawler fleet an alternative to traditional regulations of fisheries to avoid rent dissipation is the use of individual transferable quotas itqs where prices in the quota market provide the necessary information to owners of harvest rights to contract with each other however even under such a decentralized regime information on the underlying technology of the fishing vessels is also necessary first since most fisheries consist of many interrelated production processes in order to avoid rent dissipation by discarding wrong output mix etc the structure of production in the multispecies fishery must be known to design a proper quota system second an itq system may create incentives for misreporting by understating the actual catch this may especially be the case where the expected degree of self enforcement is low the paper proposes a way to reduce the information requirements under regulation with asymmetric information by constructing a typical firm and comparing performance for the other vessels to this firm based on the typical firm and if the industry is relatively homogenous the performance and hence catch of any other firm in the industry can be predicted within a certain range further the paper applies this idea to the norwegian trawler fleet to assess the production structure in terms of jointness input output separability and the supply and demand elasticities for the fishing firms this information characterizes the fishery and thus how the quota system may be designed and how to construct a yardstick in order to reduce the enforcement cost under a decentralized regulation of itqs

diversification consistent data envelopment analysis with general deviation measures abstract we propose new efficiency tests which are based on traditional dea models and take into account portfolio diversification the goal is to identify the investment opportunities that perform well without specifying our attitude to risk we use general deviation measures as the inputs and return measures as the outputs we discuss the choice of the set of investment opportunities including portfolios with limited number of assets we compare the optimal values efficiency scores of all proposed tests leading to the relations between the sets of efficient opportunities strength of the tests is then discussed we test the efficiency of 25 world financial indices using new dea models with cvar deviation measures

testing for input substitution in a regulated fishery input restrictions are commonly used to prevent rent dissipation in fisheries this paper examines whether these schemes are successful by calculating the degree of input substitution between restricted and unrestricted inputs conventional elasticities of substitution cannot be used when the firm faces controls on the use of some inputs in this case the appropriate measure of substitution the elasticity of intensity must be used data from the british columbia salmon fishery provide evidence of input substitution possibilities for two vessel types these results call into question the usefulness of input control schemes

estimation of cost functions in a data poor environment the case of capacity estimation in fisheries fisheries economic analysis is often handicapped by the lack of adequate data to undertake robust econometric analyses in this study a translog cost function was required to estimate the potential direction of adjustment in a uk fleet segment if a new regulatory regime was introduced however the available data were not appropriate for such estimation data envelopment analysis dea was used to modify the data subsequently used in the estimation of the long run cost function the resulting model appears robust and is consistent with economic theory and the supporting evidence produced using dea

estimating the elasticity of substitution between restricted and unrestricted inputs in a regulated fishery a probit approach abstract catch effort vessel and skipper characteristic data for a sample of boats involved in the tasmanian rock lobster fishery in the 1983 1984 season are used to estimate a fishing effort production function nested in a cobb douglas fishery production function the initial effort function is translog but tests suggest that the ces form cannot be rejected the vessel s choice of fishing ground is modeled by a probit equation the output from which is included in the ols estimation of the production function the elasticity of substitution between the inputs which are restricted by regulation and the other inputs is of particular interest as it determines whether input restriction is an efficient form of regulation for the fishery the results suggest a value significantly less than unity

production technology costs and multiproduct industry structure an application of the long run profit function to the new england fishing industry the long run multiproduct profit function is developed to provide a more general procedure than the static minimum cost function to examine the technological and cost determinants of multiproduct industry structure and the likely form of any market equilibrium in this approach outputs are endogenous and the long run equilibrium levels of quasi fixed factors are endogenously determined the multiproduct structure of the multispecies new england fishing industry and the likely multi

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

from efficiency measurement to efficiency improvement the choice of a relevant benchmark abstract this article deals with efficiency improvement and how to identify appropriate benchmarks for inefficient firms to imitate we argue that the most relevant benchmark is the most similar efficient firm having interpreted similarity in terms of input endowments the problem reduces to find the closest reference firm on the efficient subset of the isoquant to such an end we introduce the concept of input specific contractions this concept allows to find the shortest path to the efficient subset this information can be used to advise inefficient firms about which efficient firm to visit in order to detect its mistakes and to learn better managerial practices

fishing revenue productivity and product choice in the alaskan pollock fishery a key element in evaluating fishery management strategies is examining their effects on the economic performance of fishery participants yet nearly all empirical studies of fisheries focus exclusively on the amount of fish harvested the economic benefits derived from fish stocks involve the amount of revenue generated from fish processing which is linked to both the way fish are harvested and the products produced from the fish in this study we econometrically estimate a flexible revenue function for catcher processor vessels operating in the alaskan pollock fishery recognizing potential endogeneity and a variety of fishing inputs and conditions we find significant own price supply responses and product substitutability and enhanced revenues from increased fishing days and tow duration after a regulatory change introduced property rights through a new fishing cooperative we also find significant growth in economic productivity or higher revenues over time after controlling for observed productive factors and price changes which exceeds that attributable to increased harvest these patterns suggest that the move to rights based management has contributed significantly to economic performance in the pollock fishery

what drives investment cash flow sensitivity around the world an asset tangibility perspective motivated by ongoing debates on investment cash flow sensitivity icfs and its documented decline and disappearance in the u s we investigate the determinants of icfs using firm level data across 41 countries for the 1993 2013 period we document an important role of asset tangibility in explaining the patterns in icfs asset tangibility affects icfs through two channels investment intensity and cash flow persistence as the share of tangible capital investment and cash flow persistence has fallen in developed economies icfs has declined in contrast as developing economies operate with more tangible capital have higher investment rates and more persistent cash flows their icfs is more stable the results support our explanation of icfs as a reflection of capital investment intensity and income predictability rather than a measure of financial constraints

reason and war a new specification of the expected utility model of international conflict places expected utilities within a polar coordinate system treats thirdparty choices in a manner more consistent with classical forms estimates the expected utilities derived from not challenging existing policies more fully represents the expected costs of conflict and normalizes expected utilities regardless of system size by assuming that the probability of escalation of a dispute increases monotonically with leaders expectations of gain we derive continuous functions for the probabilities of war intervention violence and peace the revised theory significantly improves our ability to discriminate between violent and nonviolent disputes and between violent disputes that escalated to warfare and those that did not in europe between 1816 and 1970 in this essay

adjustment cost and supply response in a fishery a dynamic revenue function in industries where firms can adjust product mix in response to price changes the process can be delayed by adjustment costs an example is fishermen who change fishing grounds to target different species if adjustment costs are sufficiently large this may hamper the fishermen s response so that regulatory tools that are not efficient in the long run are useful in the short run moreover adjustment costs can influence the choice of species targeted in this paper dynamic supply equations are specified using a revenue function approach different hypotheses about the dynamics of the supply equations are tested for norwegian trawlers

public regulation and the structure of production in multiproduct industries an application to the new england otter trawl industry this article considers the problem of managing multispecies fishing industries as one of regulating the production of individual multiproduct firms the multispecies new england otter trawl industry is examined within this framework empirical results derived from estimating a multiproduct profitfunction indicate that management consistent with the structures ofmultiproduct production and costs would directly regulate inputs little support is provided for applying the traditional bioeconomic model to the fishery studied

a generalized distance function and the analysis of production efficiency a generalization of shephard s distance functions is proposed extending the usefulness of distance functions in economic analysis applications to efficiency measurements and productivity analysis are presented new indexes of productivity and technical allocative and scale efficiency are proposed and analyzed interpretation of these indexes in terms of ray average cost ray average revenue and cost to revenue ratio is discussed

the costs of war a rational expectations approach a model of war costs is presented that is based on the utility nations expect to derive from the war as well as on the technological gap between adversaries and the short term tactical tit for tat calculations that must occur on the battlefield this model explains nearly three quarters of the variance in battle deaths per million population per month of war experienced by war initiators approximately one quarter of the variance in war costs is accounted for by considering the position of the initiator s opponent a second model based on marginal changes in expected utility technological differences and tit for tat is shown to account for more than one third the variance regardless of whether war costs are viewed by the initiator or an opponent in a war this study therefore provides a useful explanation of war intensity and contributes to the cumulative lawlike implications of the expected utility approach on which it is based

semi radial technical efficiency measurement semi radial efficiency measurement combines technical efficiency as captured by the classical farrell measure with an economically meaningful mix efficiency component the semi radial evaluation we propose proceeds in two steps first we build on the price interpretation of the generally accepted koopmans efficiency notion to characterize appropriate benchmarks next we present both a quantity based distance measure and its dual price based equivalent to evaluate the mix efficiency factor the type of measures we propose may e g be used to provide a price rationale for the zieschang technical efficiency evaluation procedure

the indian auto component industry estimation of operational efficiency and its determinants using dea in this paper the performance analysis of the indian auto component industry is carried out from the perspectives of an original equipment manufacturer and a component supplier various efficiency measures are estimated using data envelopment analysis with publicly available financial data on a representative sample of 50 firms the first stage analysis reveals various operational inefficiencies in the auto component industry which are subsequently decomposed into technical input mix and scale efficiencies the study finds evidence that a majority of the inefficient firms are operating in the diminishing returns to scale region and demonstrates potential savings through benchmark input targets a second stage analysis aimed at exploring root causes of inefficiencies finds that substitution of labour for capital could be causing a variety of inefficiencies including the input mix inefficiency in the indian component industry the empirical results also suggest that unlike the global auto supply chain higher average inventories are required for higher operational efficiencies in the indian context contrary to the popular expectations the technology licensing does not show significant influence on efficiency at least in the short term whereas efficient working capital management does result in higher operational efficiencies the study also unearths the need to reform labour laws which are significantly contributing to various inefficiencies in the indian component industry

decomposing capacity utilization in data envelopment analysis an application to banks in india abstract this paper briefly reviews the existing methods of capacity utilization in nonparametric framework from economic perspectives and then suggests an alternative in the light of limitations therein in the spirit of work by coelli et al coelli t j grifell tatje e perelman s 2002 capacity utilisation and profitability a decomposition of short run profit efficiency international journal of production economics 79 261 278 we propose two methods radial and non radial to decompose the input based physical technological capacity utilization into various meaningful components viz technical inefficiency ray economic capacity utilization and optimal capacity idleness a case study of indian banking industry is taken as an example to illustrate the potential application of these two methods of decomposition our two broad empirical findings are that first competition created after financial sector reforms generates high efficiency growth and reduces excess capacity second the cost gap of the short run cost from the actual cost is higher for the nationalized banks over the private banks indicating that the former banks though old do not reflect their learning experience in their cost minimizing behavior

cost structure and capacity in the norwegian pelagic fisheries the parameters of the short run cost function are estimated for three vessel types taking part in the norwegian pelagic fisheries purse seine vessels trawlers and coastal vessels the generalized translog functional form is used estimates of returns to scale are calculated and the results indicate that there are substantial economies of scale in all vessel classes it is further investigated whether excess capacity varies with vessel size and age the analysis suggests increased quotas per vessel to avoid rent dissipation with the total allowable catch given the number of participating vessels must be reduced

resource rent in individual quota fisheries traditional fisheries management schemes generate incentives for vessels to maximize catch resulting in rent dissipation and overcapacity individual vessel quota management schemes change the incentives to maximize profit and have the potential to generate resource rent and reduce capacity an interesting question is whether it is the changed incentives due to individual quota or the capacity reduction due to transferability of individual quota that is most important in generating rent in this study a cost function approach is used to model and measure rent generated and potential rent in a fishery managed with individual vessel quotas

production in a schooling fishery the case of the north sea herring fishery the purpose of this paper is to undertake an empirical analysis of the harvest production function for the north sea herring fishery the approach of the paper is to specify a general production function where output harvest is a function of variable inputs and fixed factors in particular output elasticities and returns to scale will be analyzed moreover the effect of fisheries regulations on harvesting will be investigated the empirical work is based on cross sectional data for 1968 1971 and 1975 for empirical estimation different functional forms as well as statistical procedures are employed the empirical results indicate that there is a rising marginal product to the variable input in the fishery this somewhat surprising result which is not commonly seen in the literature and indicates that the boats operate in stage one is attributed to interactions between pre postand main season fisheries fishery regulations that were in force including total quotas and closed seasons are found to be either ineffective or causing boats to operate inefficiently in section i the fishery and the data are described while the model is specified in section ii empirical results from estimating the production function are presented in section iii while the work is briefly summarized in section iv

measures of technical efficiency abstract fare and lovell j econom theory 19 1978 150 162 suggest four properties that a measure of technical efficiency should satisfy the commonly employed debreu farrell measure fails three of them necessary and sufficient conditions for a measure to satisfy the four conditions are provided and recently proposed measures are analyzed in the light of this result also it is argued that the debreu farrell measure has several desirable properties when one takes account of 1 perhaps unknown market prices and the relationship between technical and economic efficiency and 2 its characterization as a measure of economic efficiency using the shadow prices implicit in the production technology

technical efficiency effects of input controls evidence from australia s banana prawn fishery this paper provides the first ex post estimates of the effects of input controls on technical efficiency in a fishery using individual vessel data from the northern prawn fishery of australia for the years 1990 1996 and 1994 2000 stochastic production frontiers are estimated to analyse the efficiency impacts of input controls on engine and vessel size the results indicate that technical efficiency is increasing in a measure of vessel size and engine capacity that was controlled by the regulator from 1985 to 2001 and decreasing in an unregulated input gear headrope length the study shows that fishers have substituted from regulated to unregulated inputs over the period 1990 2000 and technical efficiency has declined coincident with increasing restrictions on vessel size and engine capacity the decline in technical efficiency indicates that the goal of the regulator to increase economic efficiency has not been realized

explaining non compliance in the norwegian coastal cod fishery an application of the multinomial logit establishing motive is central to the analysis of criminal behaviour this article analyses the range of motives for noncompliant behaviour among coastal cod fishermen a multinomial logit model is employed to analyse the reasons that underlie various motives the four motives compared in this study are economic technological and social and motives caused by bureaucracy and legitimacy problems the economic motive is found to be most important for coastal fishermen however the cross sectional data indicate that motives vary with fishing gear vessel length and fishermen s age the results indicate that identifying motives for noncompliant behaviour is not straightforward but is important for reducing the extent of infringements of the regulations fishermen who use gill net seine and long line for example are more often motivated to noncompliance by technical problems and bureaucracy than hand jig fishers the study suggests that in order to prevent noncompliance behaviour the authorities manageme

war and expected utility theory in his book the war trap bruce bueno de mesquita claims to offer a deductive theory of international conflict based on the assumption that foreign policy makers attempt to maximize their expected utility the theory is subjected to a systematic empirical test that seems to provide impressive confirmation the first part of this article examines bueno de mesquita s theory and argues that it cannot be derived from his assumptions the second part examines the operational version of the theory which was the one actually tested and argues that it can be more plausibly interpreted as a version of a different theory one that bueno de mesquita claims to have discredited the essay concludes by discussing the significance of this book with regard to the question of whether theories of individual rational choice can explain foreign policy decisions

catch limits capacity utilization and cost reduction in japanese fishery management japan s fishery harvest peaked in the late 1980s to limit the race for fish each fisherman could be provided with specific catch limits in the form of individual transferable quotas itqs the market for itqs would also help remove the most inefficient fishers in this article we estimate the potential cost reduction associated with catch limits and find that about 300 billion yen or about 3 billion dollars could be saved through the allocation and trading of individual specific catch shares

an integrated performance evaluation of financial holding companies in taiwan abstract there has been a worldwide trend for financial institutions to become larger in scale and more diversified in scope with taiwan being no exception fourteen financial holding companies fhcs have each begun to function as a management umbrella in taiwan by investing in different types of financial services such as banking insurance and securities this paper focuses on this local financing issue from an integrated methodological perspective by model innovations proposed in several earlier studies for example the efficiency of profitability and marketability are combined to evaluate the fhcs performance to conduct a valid and reliable evaluation process while applying the fhc s case in taiwan we integrate the slacks based measure sbm and slacks based measure of super efficiency super sbm models in order to directly handle the slacks and identify the best performers a new scheme that deals with the negative output data in the sbm super sbm is also introduced inter temporal efficiency change which is decomposed into catch up and frontier shift effects is analyzed by means of the sbm based malmquist index a decision making matrix is also presented to help the fhcs managerial authorities position themselves in the industry the above techniques show with a high degree of consistency that large sized fhcs perform better than small sized ones