cost efficiency and optimal scale of electricity distribution firms in taiwan an application of metafrontier analysis abstract this paper analyzes the cost efficiency and optimal scale of taiwan s electricity distribution industry due to the substantial difference in network density firms may differ widely in production technology we employ the stochastic metafrontier approach to estimate the cost efficiency of 24 distribution units during the period 1997 2002 empirical results find that the average cost efficiency is overestimated using the traditional stochastic frontier model especially for low density regions the average cost efficiency of the high density group is significantly higher than that of the low density group as it benefits from network economies this study also calculates both short term and long term optimal scales of electricity distribution firms lending policy implications for the deregulation of the electricity distribution industry

cost efficiency and electricity market structure a case study of oecd countries the oecd electricity sector has witnessed significant institutional restructuring over the past three decades as a consequence many power generation utilities now act as unregulated companies that technically compete to sell power on an open market this paper analyses the performance in term of cost efficiency for electricity generation in oecd power sector while accounting for the impact of electricity market structures we employ the short run cost function in which capital stock is treated as a quasi fixed factor input empirical models are developed for the cost function as a translog form and analysed using panel data of 25 countries during the period 1980 to 2009 we show that it is necessary to model latent country specific heterogeneity in addition to time varying inefficiency the estimated economies of scale are adjusted to take account of the importance of the quasi fixed capital input in determining cost behaviour and long run constant returns to scale are verified for the oecd generation sector the research findings suggest there is a significant impact of electricity market regulatory indicators on cost in particular public ownership and vertical integration are found to have significant and sizable increasing impacts on cost thereby indicating policy lessons on the desirable ways to implement structural electricity generation reforms

a comparison of stochastic frontier approaches for estimating technical inefficiency and total factor productivity this article compares standard stochastic frontier models for panel data with a number of recently developed models which attempt to control for unobserved heterogeneity in the inefficiency component results are used to construct a generalized malmquist total factor productivity tfp index for the irish tillage sector while our application yields similar general tfp trends across models it is evident that this new class of model leads to fewer theoretical inconsistencies in the production frontier furthermore inefficiency estimates across models are critically compared and the potential benefits of controlling for unobserved heterogeneity are highlighted

did unilateral divorce laws raise divorce rates a reconciliation and new results application of the coase theorem to marital bargaining suggests that shifting from a consent divorce regime to no fault unilateral divorce laws should not affect divorce rates each iteration of the empirical literature examining the evolution of divorce rates across us states has yielded different conclusions about the effects of divorce law liberalization i show that these results reflect a failure to jointly consider both the political endogeneity of these divorce laws and the dynamic response of divorce rates to a shock to the political regime taking explicit account of the dynamic response of divorce rates to the policy shock i find that liberalized divorce laws caused a discernible rise in divorce rates for about a decade but that this increase was substantially reversed over the next decade that said this increase explains very little of the rise in the divorce rate over the past half century both administrative data on the flow of new divorces and measures of the stock of divorcees from the census support this conclusion these results are suggestive of spouses bargaining within marriage with an eye to their partner s divorce threat

returns to scale in a highly regulated economy evidence from indian firms abstract this paper examines returns to scale for a panel of indian manufacturing firms from 1976 1985 a period in which government regulations restricted firms expansion observers have argued that these regulations led to unexploited scale economies in indian firms and our estimates lend limited support to this view although a large number of firms produce below the minimum efficient scale average returns to scale for the various industries are not significantly different from one our estimates suggest that recent deregulation will not generate significant gains in scale efficiency unless expansion is heavily biased towards growth in the smaller firms

the impact of legislation on divorce a hazard function approach the paper examines the impact of the introduction of no fault divorce legislation in australia the approach used is rather novel a hazard model of the divorce rate is estimated with the role of legislation captured via a time varying covariate the paper concludes that contrary to us empirical evidence no fault divorce legislation appears to have had a positive impact upon the divorce rate in australia

examining the cost efficiency of chinese hydroelectric companies using a finite mixture model this paper evaluates the operational activities of chinese hydroelectric power companies over the period 2000 2010 using a finite mixture model that controls for unobserved heterogeneity in so doing a stochastic frontier latent class model which allows for the existence of different technologies is adopted to estimate cost frontiers this procedure not only enables us to identify different groups among the hydro power companies analysed but also permits the analysis of their cost efficiency the main result is that three groups are identified in the sample each equipped with different technologies suggesting that distinct business strategies need to be adapted to the characteristics of china s hydro power companies some managerial implications are developed

an economic model of cohabitation and divorce abstract the positive correlation between the rates of cohabitation and divorce has long been established this paper seeks to determine the direction of causation between these two variables a simultaneous equations model is specified with cohabitation and divorce rates as endogenous variables and using data aggregated to the state level for 1990 this procedure suggests that the divorce rate is a significant factor in explaining variations across states in the cohabitation rate and that the divorce rate is itself influenced by cohabitation behavior this finding strengthens the results put forth by various economic and sociological single equation studies this synthesis of information and data provided by sociologists with economic theory and methodology suggests further research in modelling demographic variables as joint outcomes of the same process

no fault divorce laws and the labor supply of women with and without children we use a difference in difference in difference estimator to compare changes in labor force participation weeks and hours of work associated with no fault divorce laws allowing for differential responses for married women with and without children although other research has found that the labor supply of women in general does not respond to no fault divorce laws we find that no fault divorce laws are associated with increases in the labor supply of married mothers relative to married nonmothers even after controlling for changes in female labor supply in states without no fault divorce laws and for property division rules associated with the laws

cost structure and productivity growth in european railway systems the purpose of this paper is threefold first to empirically investigate the coststructure of the railway systems in ten european countries belgium denmark france germany greece italy luxembourg the netherlands portugal and the united kingdom of the european union second to provide measures of economies diseconomies of scale and fully investigate the manner by which economies of scale have affected the cost structure of the system and have been affected by the growth in input prices and technology and third to measure economic efficiency and identify its sources in achieving this purpose the translog technology has been used and the translog model was estimated using time series data covering the period 1969 1993 zellner s iterative method was used in estimating the translog model

cost structure and capacity utilisation in multi product industries an application to the basque trawl industry to empirically study production structure and the capacity level at which vessels are harvesting a short run translog cost function is estimated from the estimated parameters two capacity utilisation measures are calculated ray returns to scale and a dual capacity utilisation measure both capacity utilisation measures suggest that there is excess capacity in the basque trawler fleet these measures are also estimated annually and they indicate the same conclusion the basque trawler fleet can therefore gain from increased production levels

a note on capacity utilization and measurement of scale economies this article investigates the measurement of returns to scale rts via a cost function in the presence of quasi fixed inputs caves christensen and swanson ccs proposed estimation of a variable cost function and derived a formula for computing rts from it this article extends the ccs results by a investigating the bias that would result from erroneously using a total cost function for measuring rts b indicating that the ccs procedure for measuring scale economies in the presence of quasi fixed inputs is inconsistent for the case of nonhomothetic production technology and c proposing an alternative procedure that allows one to evaluate rts at long run equilibrium points even when firms in the sample are in disequilibrium the similarity between this proposed method and the temporary equilibrium approach for measuring productivity growth is noted as well the empirical results on rts are compared among the three alternative methods total cost ccs variable cost and proposed long run equil

derivation of long run factor demands from short run responses abstract the concept of the restricted cost function provides a dual approach to the analysis of short run technology it allows also under curvature restrictions inference of the different possible equilibria according to constraints on the firms moreover in this paper the properties of the restricted cost function are spelled out substitution possibilities related to the different regimes are also derived from the restricted cost function this theoretical framework is applied to characterize the french cereal producing sector by using a cross section of farms

economies of scale in the korean district heating system a variable cost function approach this paper aims to investigate the cost efficiency of south korea s district heating dh system by using a variable cost function and cost share equation we employ a seemingly unrelated regression model with quarterly time series data from the korea district heating corporation kdhc a public utility that covers about 59 of the dh system market in south korea over the 1987 2011 period the explanatory variables are price of labor price of material capital cost and production level the results indicate that economies of scale are present and statistically significant thus expansion of its dh business would allow kdhc to obtain substantial economies of scale according to our forecasts vis a vis scale economies the kdhc will enjoy cost efficiency for some time yet to ensure a socially efficient supply of dh it is recommended that the kdhc expand its business proactively with regard to informing policy or regulations our empirical results could play a significant role in decision making processes

an examination of the equilibrium specification and structure of production for canadian telecommunications multiple output models of canadian telecommunications production are estimated under different production equilibria a specification test is conducted between the short and long run equilibrium models and the long run equilibrium is rejected in order to capture the nature of the disequilibrium a dynamic cost of adjustment model is estimated for bell canada there are significant adjustment costs and it is estimated that for 1 00 of marginal capital costs the carrier must incur an additional cost of 0 30 to install the new capital into the production process

optimal prices and costs for hospitals with excess bed capacity this paper analyses theoretically and empirically issues in optimal pricing with excess hospital capacity and then applies the analysis to the issue as to whether medicare and medicaid payments cover the marginal costs of treating patients of each type the primary innovation of this paper lies in incorporating appropriate theoretical measures of hospital excess capacity to a multiproduct empirical hospital cost function and in showing how proper measures of marginal cost can be applied to the examples of medicare and medicaid reimbursement in california with a standard translog specification that ignores hospital excess capacity the estimated marginal costs of medicare and medicaid patients are higher than the reimbursement however correctly incorporating excess capacity into our model leads to considerably lower estimates of short run marginal costs suggesting that medicare hospital reimbursement is more than adequate in the short run we also develop a third marginal cost concept that of what l

on the estimation of returns to scale using variable cost functions abstract this paper compares two methods of estimating returns to scale based on variable cost functions it shows specifically how the methods differ and indicates why it is important to select an appropriate method when drawing inferences about policy

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

trade liberalization and productivity growth new evidence from the turkish rubber industry this paper empirically examines the effects of a change in foreign trade regime on productivity growth based on a generalized leontief factor demand function system total factor productivity growth tfpg rates are calculated for the turkish rubber industry during a substantial trade liberalization in the 1980s tfpg was significantly higher following trade liberalization technological change was the major contributor to this growth when a panel data estimation technique is used to explain technological change the effects of trade liberalization become clearer a one percentage point increase in the protection level led to more than a one percentage point 1 27 decline in the technological change rate

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

returns to scale from variable and total cost functions abstract estimates of the returns to scale from a variable cost function evaluated at the actual and optimal capital stocks and a total cost function are presented the estimates generally differ depending in part upon the output at which they are evaluated

marriage and divorce reply in the popular press and among policymakers the effect of no fault divorce laws on divorce rates remains an issue see e g new york times 23 july 1991 in my 1986 article in this review i show that the adoption of one form of no fault divorceunilateral divorce does not lead to a significant increase in divorce rates the theoretical model that is consistent with this empirical evidence would imply that the new law does not decrease the costs of divorce it merely redefines which party has the right to terminate the marriage

exploring hospital production relationships with flexible functional forms this paper estimates a multiproduct variable cost function using data on a sample of california hospitals the results provide useful insights into the advantages and disadvantages of flexible functional forms for cost analysis the translog function appears to provide reasonable estimates of marginal costs when evaluated at or near the approximation point of the function the estimated function performs less satisfactorily however when evaluated outside this range the paper s results do not provide strong evidence of either ray scale economies or of weak cost complementarities there is some evidence however that the degree of scale economies may be underestimated

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

factor substitution and economies of scale and utilisation in kuwait s crude oil industry abstract the cost structure of the crude oil industry in kuwait has been examined with specific focus on factor substitution and economies of scale and utilisation this has been done by estimating translog cost functions both long run and short run using time series data covering the period from 1976 to 1996 the results indicate that the implied production structure is non homothetic and the pattern of scale effect is labour saving but capital and material using the evidence also supports the presence of an induced exogenous technical change which is non neutral labour and capital using and material saving the elasticity of substitution between capital and labour is positive implying that the two inputs are substitute the results also indicate the existence of diseconomies of scale in the production of crude oil but no economies or diseconomies of utilisation

estimating a multiple output generalized box cox cost function cost structure and productivity growth in belgian railroad operations 1950 1986 abstract in this paper we estimate a multiple output generalization of berndt and khaled s box cox cost model to study the cost structure and growth in productivity in belgian railroad operations the estimated model includes several commonly used flexible functional forms as special or limiting cases empirical results indicate approximately constant returns to scale and an average rate of productivity growth of slightly less than 2 over the sample period these findings were robust across cost function specifications casting some doubt on the importance of choosing among flexible functional forms

productivity change technical progress and relative efficiency change in the public accounting industry we present evidence on components of productivity change in the public accounting industry toward the end of the 20th century using revenue and human resource data from 64 of the 100 largest public accounting firms in the united states for the 1995 1999 period we analyze productivity change technical progress and relative efficiency change over time the average public accounting firm experienced a productivity growth of 9 5 between 1995 and 1999 we find support for the hypothesis that technical progress rather than an improvement in relative efficiency was the reason for this productivity growth firms that were early movers into management advisory services mas and those that emphasized growth in mas over growth in the traditional audit and tax services enjoyed significantly higher productivity growth than their peers these firms also contributed significantly more to the industry s technical progress

estimation of input distance functions a system approach this article offers a methodology to address the endogeneity of inputs in the input distance function idf formulation of the production processes we propose to tackle endogenous input ratios appearing in the normalized idf by considering a flexible simultaneous system of the idf and the first order conditions from the firm s cost minimization problem our model can accommodate both technical and input allocative inefficiencies amongst firms we also present the algorithm for quantifying the cost of allocative inefficiency we showcase our cost system based model by applying it to study the production of norwegian dairy farms during the 1991 2008 period among other things we find both an economically and statistically significant improvement in the levels of technical efficiency among dairy farms associated with the 1997 quota scheme change which a more conventional single equation stochastic frontier model appears to be unable to detect

the effect of joint custody on family outcomes since the 1970s almost all us states have introduced a form of joint custody after divorce i analyze the causal effect of these custody law reforms on different family outcomes my identification strategy exploits the different timing of reforms across the us states estimations based on state panel data suggest that the introduction of joint custody led to an increase in marriage rates an increase in overall fertility including a shift from nonmarital to marital fertility and an increase in divorce rates for older couples accordingly female labor market participation decreased further male suicide rates and domestic violence fell in treated states the empirical evidence is consistent with the hypothesis that joint custody increased the relative bargaining power of men within marriage

marriage and trust some lessons from economics this paper examines the role of marriage as an institution for providing couples with the confidence to make long term investments in their relationship no fault divorce has undermined the notion of marriage as a contract thereby reducing the security offered by marriage and promoting opportunism by men this has weakened the bargaining power of wives both within marriage and when divorce occurs current legal reforms will improve the economic position of all divorced wives including those who are primarily responsible for the breakdown of their marriage the latter feature will encourage opportunism by women and make men less prepared to invest in their marriage the paper argues that the only way to achieve parity between men and women and deter opportunism by either sex is to return to fault based divorce both divorce settlements and the custody of children should depend on preceding marital conduct

technology debt and the exploitation of growth options abstract this paper analyzes the effect of the firm s technology on the agency costs of debt it is shown that for an important class of technologies agency costs are not a uniformly rising function of leverage for these technologies relatively high leverage can be consistent with a small tax subsidy the effect of technology on the exploitation of real options by a levered firm is examined the analysis provides a framework for a direct test of the agency cost of debt hypothesis using cost data

returns to scale concept estimation and analysis of japan s turbulent 1964 88 economy there is policy interest in factoring productivity growth into technical progress and returns to scale components our approach uses exact index number methods to reduce the parameters that must be estimated and allows us to exploit the cross sectional dimension of plant level panel data we show that the same equation can also be used to estimate harberger scale economies and technical progress indicators that require fewer assumptions estimates of the elasticity of scale for japanese establishments in three major industries over 1964 88 are presented our study spans the high growth era of the 1960s two oil shocks and other exogenous shocks il y a interet en politique publique a identifier les composantes de la croissance de la productivite attribuables au progres technique et aux rendements a l echelle l approche utilise les methodes des nombres indices exacts pour reduire les parametres qui doivent etres estimes et pouvoir exploiter la dimension transversale des donnees de panel au niveau de l etablissement on montre que la meme equation peut etre utilisee pour estimer les indicateurs d economies d echelle et de progres technique a la harberger lesquels necessitent un plus petit nombre de postulats on presente des evaluations de l elasticite d echelle pour des etablissements japonais dans trois industries importantes entre 1964 et 1988 l etude couvre la periode de forte croissance des annees 1960 celle des deux chocs petroliers et d autres chocs exogenes

marriage and divorce changes and their driving forces the family is not a static institution in recent decades marriage rates have fallen divorce rates have risen and the defining characteristics of marriage have changed the economic approach to the family seeks to explain these trends by reference to models that can also explain how and why families form gary becker s 1981 treatise on the family proposed a theory based on production complementarities in which husband and wife specialize in the market and domestic spheres respectively production complementarities also arise in the production and rearing of one s own children however production complementarities at least as initially described are decreasingly central to modern family life increased longevity and declining fertility mean that most of one s adult life is spent without one s own children in the household also the rise in marital formation at older ages including remarriage means that many families form with no intention of producing children moreover increases in female labor force participation suggest that household specialization has either declined or at least taken on a different meaning these changes have come about as what is produced in the home has been dramatically altered both by the emergence of labor saving technology in the home and by the development of service industries that allow much of what was once provided by specialized homemakers to be purchased in the market the availabil

an analysis of cost efficiency in swiss multi utilities this study presents an empirical analysis of the cost efficiency of a sample of swiss multi utilities operating in the distribution of electricity natural gas and water the multi utilities that operate in different sectors are characterized by a strong unobserved heterogeneity therefore the measurement of their performance poses an important challenge for the regulators the purpose of this paper is to study the potential advantages of recently developed panel data stochastic frontier models in the measurement of the level of efficiency for multi utility companies these models are estimated for a sample of 34 multi output utilities operating from 1997 to 2005 the alternative models are compared regarding the cost function slopes and inefficiency estimates for the inefficiency estimates the correlation between different models and the effect of econometric specification have been analyzed the results suggest that the inefficiency estimates are substantially lower when the unobserved firm specific effects are taken into account

productivity growth and some of its determinants in the deregulated u s railroad industry this study analyzes the effects of an important postderegulation innovation on rail freight productivity the elimination of cabooses and related crew members it also analyzes the overall growth of productivity in rail freight between 1983 and 1997 using a translog rail cost function estimated over a sample of class i railroads between 1983 and 1997 the results indicate that elimination of cabooses and associated crew members from freight trains reduced costs by 5 8 on the typical class i railroad in 1997 equivalent to an annual cost saving of 2 billion to 3 3 billion for all class i railroads moreover if class i railroads had no other technological advances since 1983 their 1997 costs with 1997 factor prices would have been 36 43 higher than they in fact were finally the results show that overall productivity growth in rail freight did not decelerate between 1983 and 1997 if anything it accelerated slightly

divorce law reforms and divorce rates in the usa an interactive fixed effects approach this paper estimates the eects of unilateral divorce laws on divorce rates from a panel of state level divorce rates we use the interactive xed eects model to address the issue of endogeneity due to the association between cross state unobserved heterogeneity and divorce law reforms we document that earlier studies in the literature do not fully control for unobserved heterogeneity and result in mixed empirical evidence on the eects of divorce law reforms our results while reconciling these conicting results suggest that divorce law reforms have positive eects on divorce rates but the magnitude and duration of the eects

female labor supply and divorce new evidence from ireland if participation in the labor market helps to secure women s outside options in the case of divorce separation an increase in the perceived risk of marital dissolution may accelerate the increase in female labor supply this simple prediction has been tested in the literature using time and or spatial variation in divorce legislation e g across us states leading to mixed results in this paper we suggest testing this hypothesis by exploiting a more radical policy change i e the legalization of divorce in ireland the right to divorce was introduced in 1996 followed by an acceleration of marriage breakdown rates we use this fundamental change in the irish society as a natural experiment we follow a difference in difference approach using families for whom the dissolution risk is small as a control group our results suggest that the legalization of divorce contributed to a significant increase in female labor supply mostly at the extensive margin results are not driven by selection and are robust to several specification checks including the introduction of household fixed effects and an improved match between control and treatment groups using propensity score reweighting

law property and marital dissolution this paper challenges the view that legal rights are not important in affecting whether people divorce but it puts as much emphasis on property rights given for example by the law on alimony as on dissolution rights in the united states the paper sets out two stylised models of marriage and examines the consequences of fuller compensation for economic sacrifices made during marriage if the dominant economic issue in a marriage is who undertakes household tasks then a law giving fuller compensation makes divorce more likely if the dominant issue is child custody divorce is less likely excerpt

input substitution economies of scale and productivity growth in the us upholstered furniture industry cost factor demand and productivity growth are considered in the upholstered furniture industry over 1958 87 factors are divided into labour capital and materials it is found that all inputs are substitutes in production although substitution elasticities are small factor demand is price inelastic for all inputs the industry operates around minimum average cost productivity growth is small but significant the results indicate that labour will continue to be important in the industry however regional comparative advantage is not related to labour alone the results suggest that policies to attract or retain the industry must consider the low degree of factor substitution

scale economies and inefficiency of u s dairy farms this study employs data drawn from the 2000 agricultural resource management survey a u s department of agriculture sponsored farmers survey the article estimates returns to scale relationships across dairy farms of different sizes and across different regions incorporating variables hypothesized to influence farm performance results point to significant scale economies in u s dairy farms and underscore the importance of taking account of inefficiency when estimating scale economies contrary to previous research the preferred cost function specification does not show a region of decreasing returns to scale this finding helps explain why the average size of dairy farms has been increasing

divorce rates and bankruptcy exemption levels in the united states abstractalthough increasing bankruptcy exemption levels protects consumers from negative asset shocks an unintended consequence of this policy that remains unexplored is the effect on divorce rates this effect arises from reducing the benefits of marital risk sharing i establish conditions under which increases in exemption levels lead to more divorce and investigate using data from vital statistics of the united states i estimate that increases in exemption levels occurring between 1989 and 2005 resulted in more than 200 000 additional divorces during this period and that the effect on divorce rates in 2005 is comparable in magnitude to that found for the introduction of unilateral divorce laws by wolfers

returns to scale in the long run the dynamic theory of cost the concept of scale economies is muddled by the problem specific nature of determining the length of run the distinction between the short and long run becomes a prime consideration in determining the appropriate time scale of economic decision making strategies these strategies center on the choice of factors of production that are assumed to be fixed when factor allocation decisions are to be made

reducing urban public transport costs by tendering lots a panel data estimation allotment is for urban authorities a governance strategy to reduce public transport costs it consists of dividing a network into several lots so as to multiply the number of calls for tender on the one hand gains should be obtained by increasing competition for the market and reducing the costs of obtaining accurate information on the other hand cutting a network into several parts is also expected to have negative consequences on production costs in terms of lower returns to scale many industry stakeholders believe that the latter element more than compensates for the former in this article we estimate a translog cost function with a panel of 141 french urban public transport networks our main conclusion is that scale economies are exhausted for a production of about 3 million vehicle kilometres per year therefore as far as returns to scale are concerned allotment would reduce the costs of public transport services for the main cities of our sample a second dividend for allotment is then presented and implies that the assumed trade off between returns to scale and increased competition is irrelevant

uncertain demand the structure of hospital costs and the cost of empty hospital beds abstract in this paper we reformulate the theory of cost and production to take account of uncertain demand facing a firm in the reformulated theory the duality between cost and production no longer obtains and demand distribution parameters enter the cost function as well as the traditional outputs and input prices we then estimate a short run cost function for a hospital facing uncertain demand using data from a national sample of over 5000 hospitals for the years 1983 1987 the traditional cost model is strongly rejected in favor of the reformulated model this model is used to calculate the cost of empty hospital beds controlling for the effect of uncertain demand on the structure of hospital costs the cost of an empty hospital bed is calculated as 36 443 in 1987 dollars we estimate that a one percent decrease in the number of hospital beds would decrease hospital costs by slightly over one third of one percent increasing the occupancy rate from the average 1992 level 65 percent back to the average 1980 level 76 percent is estimated to save the average hospital over 2 million or 9 5 percent of costs

standard costs of regional public rail passenger transport evidence from italy the paper estimates the standard cost in italian regional public rail passenger transport services lptr depending on service characteristics the results highlight the crucial role of number of

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

price margins and capital adjustment canadian mill products and pulp and paper industries abstract the purpose of this paper is to estimate a model incorporating non competitive behaviour in product and factor markets in addition capital accumulation is subject to adjustment costs so that firms are not constrained to be in long run equilibrium the model is applied to two major canadian manufacturing industries pulp and paper and mill products the results show for both industries in each of three product markets and the wood input market that there is competitive behaviour in addition the industries are not in long run equilibrium as marginal adjustment costs cause marginal profit to exceed the rental rate on capital with the industries exhibiting short run competitive behaviour in product and factor markets new estimates are derived for scale economies and rates of technological change unlike the results from other studies both industries exhibit small scale economies and positive rates of technological change

explaining differences in milk quota values the role of economic efficiency this paper explores the relationship between milk quota values and economic efficiency in order to analyze current government interventions in quota allocations among producers for this purpose we estimate a short run variable cost function using a panel of spanish dairy farms quota values are then decomposed into economic efficiency price and scale effects in order to assess the relative influence of these factors on quota values we find that efficiency is important in explaining quota values but is uncorrelated with observable farm characteristics this casts doubts on the government s ability to allocate quotas to efficient farms in the way a well functioning quota market does

international comparison of bank production characteristics and technological change in this paper we conduct an international comparison of bank production and technological characteristics the comparison is performed using novel evidence on changes in labour demand over the period 1980 89 for banks headquartered in canada france west germany italy japan and the united states the results suggest that there is relatively low substitutability of labour for capital in the production process of these banking organizations significant scale economies were found with regards to the expansion of output and the concomitant increase in labour in addition technological change operated to lower the quantity of inputs needed to produce a given level of outputs and increased the minimum efficient size bank over the sample period many of the production characteristics and technology effects varied significantly across countries these findings imply that intercountry differences in production characteristics and technological change should be explicitly recognized in bank strategic planning

quasi fixed inputs and long run equilibrium in production a cointegration analysis this paper proposes a cointegration approach to testing the validity long run equilibrium in production where capital and labour are taken as quasi fixed inputs previous studies consider only capital as the quasi fixed input and do not take account of the time series properties of the variables assuming implicitly that they are stationary the canonical cointegrating regressions ccr procedure is employed to test for cointegration in both the single equation and the seemingly unrelated regressions framework and long run equilibrium conditions are tested the evidence from us manufacturing reveals that capital and labour are not fully adjusted to their long run optimal values casting doubt on the long run equilibrium hypothesis copyright 2001 john wiley sons ltd

marriage and divorce informational constraints and private contracting the relationship between divorce rates in the united states and laws regulating divorce are analyzed using data from a special current population survey undertaken in 1979 with particular reference to the adoption by many states of no fault divorce laws the author utilizes a contract theoretic framework to examine the impact of both legal and informational constraints on several aspects of the marriage relationship 1 the probability of divorce 2 compensation at divorce i e the terms of the divorce settlement 3 the probability of entering marriage and 4 incentives for investment in marriage specific capital two different models are developed the first assumes that ex post information about the value of each spouses opportunites at divorce is symmetric and that since divorce would only occur if the joint benefits outweigh the joint costs the law has no effect on the divorce rate the second model asserts that the existence of asymmetric information results in a fixed wage marriage contract and that divorce would be higher in states that allow unilateral divorce the evidence supports the first of these hypotheses excerpt

female earnings and the divorce rate a simultaneous equations model economists have contributed a great deal of research both theoretical and empirical to the study of marital formation and dissolution many empirical examinations of marriage and divorce rates exist based on becker s seminal contributions to the literature all of these divorce studies are single equation models with female earnings assumed exogenous as discussed by becker 1981 however causality may run in the opposite direction as well the divorce rate may influence female earnings this paper estimates a simultaneous equations model in which divorce rates and female earnings are the jointly endogenous variables data are by state for 1960 1970 1980 and 1990 the state wide divorce rate equation is an extension of waters and ressler 1999 and the specification of a state wide earnings equation follows standard human capital theory the specification of joint endogeneity between female earnings and the divorce rate allows valid inferences to be made regarding the effect of female earnings on

economic information about ironmaking ironmaking is an important world wide industry iron produced in blast furnaces is a crucial inout for almost three quarters of the steel produced in the world according to the international iron and steel institute few industries have recieved as much attention as the steel industry yet very little is known about the cost structure of ironmaking one of its major inputs this paper attempts to fill that void by the first application of the restricted translog cost function on time series data for the ironmaking plant of one of the world s major steel producers all this information revealed is new for the first time estimates of the elasticities of inout demand for variables inputs and elasticities of substitution are presented major results include the findings that there is more substitution are presented major results include the findings that there is more substitution between variable inputs than was previously thought that disembodies technical change exists and is hicks neutral and that te

a general index of technical change this paper outlines a procedure for estimating a general index of technical change within the context of a quite general production technology specifically when panel data are available for firms in an industry time specific dummies can be combined in a nonlinear estimation procedure to yield a general index of technical change that may be both nonneutral and scale augmenting this approach offers numerous advantages over the traditional time trend representation of technical change for example the general index can serve as the basis for analysis of the determinants of technical change results for a sample of 30 electric utilities over the period 1951 78 show that the productivity decline of the 1970s can be attributed primarily to sulphur oxide restrictions and secularly declining capacity utilization due to rapidly increasing peak load demands

the sensitivity of productivity growth measures to alternative structural and behavioral assumptions an application to electric utilities 1951 1984 this article examines the sensitivity of three alternative multifactor productivity growth estimates for the electric utility industry during the 1951 1984 period the results indicate that multifactor productivity growth estimates are quite sensitive to the relaxation of various structural and behavioral assumptions first a benchmark measure is constructed along the lines suggested by solow 1957 this residual approach produces estimates that suggest a substantial decline in firm level productivity growth after the mid 1960s prior to obtaining the second and third estimates empirical tests of the structural and behavioral assumptions underlying a firm s operation are conducted first the structural assumption of constant returns to scale is rejected and the resulting long run scale adjusted multifactor productivity growth estimates are found to be consistently less than the residual estimates second the behavioral assumption of long run equilibrium is rejected comparing the long run scale ad

a goal programming constrained regression review of the bell system breakup the recently implemented court decision to break up bell american telephone telegraph co to accord with u s anti trust laws represents a highly significant policy decision which is proving to be influential in other countries as well as the u s the telecommunication industry is of such size and importance that even relatively small economies that might be lost with bell s breakup as a natural monopoly could involve substantial welfare losses to consumers and producers studies commissioned by the u s justice department that approached this topic by econometric methods reported that the evidence failed to support the contention that bell was a natural monopoly here a goal programming constrained regression as developed in the management science literature uses the same functional form and the same data but nevertheless reverses the main findings of the econometric studies in every one of the 20 years covered this kind of difference in results obtained by two different methods of analysis poi

economies of scale and utilization in electricity generation in kuwait cost structure of electricity generation in kuwait has been examined with specific focus on the economies of scale and utilization this has been done by estimating a translog variable cost function using time series data covering the period from 1965 to 1990 the results indicate the existence of diseconomies of scale in the generation of electricity but no economies or diseconomies of utilization

price cost margins exports and productivity growth with an application to canadian industries a model is estimated for oligopolistic industries producing multiple outputs in short run equilibrium outputs are sold domestically and exported while capital is treated as a quasi fixed factor the model is applied to the canadian non electrical machinery electrical products and chemical products industries the results show that there is significant oligopoly power in each of the industries and that the degree of this power differs between the domestic and export markets total factor productivity is decomposed price cost margins exert little influence but the rate of technological change returns to scale and the rate of capital adjustment determine productivity growth

marriage and divorce comment the author comments on an article by h elizabeth peters concerning the impact of state laws particularly no fault divorce laws on divorce rates in the united states a reply by peters is included pp 686 93 annotation

a nonparametric analysis of variable cost minimization in the united states paper industry nanparametric tests of consistency of data with variable cost minimization returns to scale homotheticity are described and applied to data from the us paper industry results indicate that data from the us paper industry are consistent with the minimization of variable costs increased productivity due to technological improvements or increasing returns to scale and a homothetic production function a method derived from nonparametric estimation for screening hypothesized data sets prior to predictive use with an estimated production function is described

technical efficiency of european railways a distance function approach this study has two principal objectives the first objective is to measure and compare the performance of european railways the second objective is to illustrate the usefulness of econometric distance functions in the analysis of production in multioutput industries where behavioural assumptions such as cost minimization or profit maximization are unlikely to be applicable using annual data on 17 railways companies during 1988 1993 multioutput distance functions are estimated using corrected ordinary least squares cols the resulting technical efficiency estimates range from 0 980 for the netherlands to 0 784 for italy with a mean of 0 863 the distance function results are also compared with those obtained from single output production functions where aggregate output measures are formed using either total revenue or a tornqvist index the results obtained indicate substantial differences in parameter estimates and technical efficiency rankings casting significant doubt upon the reliability of

fiscal and tax policy support for energy efficiency retrofit for existing residential buildings in china s northern heating region energy efficiency retrofit for existing residential buildings eererb in china s northern heating region is an important component of the national energy strategy the main content and related subject in eererb performance is the basis of understanding and developing targeted policies so this paper designed the content system of eererb and then provided a cost benefit analysis on related subjects assessed the government s function in eererb and come to the conclusion that the chinese government should increase fiscal fund investment and implement more fiscal and tax incentive policies moreover in view of china s current policy which lacks long term mechanism and flexibility this paper proposed specific policy recommendations including clarifying the government s corresponding responsibilities at all levels and increasing the intensity of the central government s transfer payments it further proposed targeted financial and tax policies for supporting and encouraging heating enterprises and owners as well as policies to cultivate energy saving service markets and to support the esco

the impact of ownership unbundling on cost efficiency empirical evidence from the new zealand electricity distribution sector abstract several countries around the world have introduced reforms to the electric power sector one important element of these reforms is the introduction of an unbundling process i e the separation of the competitive activities of supply and production from the monopole activity of transmission and distribution of electricity there are several forms of unbundling functional legal and ownership new zealand for instance adopted an ownership unbundling in 1998 as discussed in the literature ownership unbundling produces benefits and costs one of the benefits may be an improvement in the level of the productive efficiency of the companies due to the use of the inputs in just one activity and a greater level of transparency for the regulator this paper analyzes the cost efficiency of 28 electricity distribution companies in new zealand for the period between 1996 and 2011 using a stochastic frontier panel data model a total cost function and a variable cost function are estimated in order to evaluate the impact of ownership unbundling on the level of cost efficiency the results indicate that ownership separation of electricity generation and retail operations from the distribution network has a positive effect on the cost efficiency of distribution companies in new zealand the estimated effect of ownership separation suggests a positive average one off shift in the level of cost efficiency by 0 242 in the short run and 0 144 in the long run

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

cost function estimates scale economies and technological progress in the turkish electricity generation sector abstract turkish electricity sector has undergone significant institutional changes since 1984 the recent developments since 2001 including the setting up of a regulatory agency to undertake the regulation of the sector and increasing participation of private investors in the field of electricity generation are of special interest this paper estimates cost functions and investigates the degree of scale economies overinvestment and technological progress in the turkish electricity generation sector for the period 1984 2006 using long run and short run translog cost functions estimations were done for six groups of firms public and private the results indicate existence of scale economies throughout the period of analysis hence declining long run average costs the paper finds empirical support for the averch johnson effect until 2001 i e firms overinvested in an environment where there are excess returns to capital but this effect was reduced largely after 2002 technological progress deteriorated slightly from 1984 1993 to 1994 2001 but improved after 2002 overall the paper found that regulation of the market under the newly established regulating agency after 2002 was effective and there are potential gains from such regulation

privatisation and the efficiency of decentralised electricity generation some evidence from inter war britain the privatization of the electricity supply industry in england and wales has established a decentralized system of supply this paper considers the efficiency of the decentralized interwar electricity supply industry a generalized stochastic frontier cost function is specificed enabling the estimation of returns to scale and inefficiency at plant level these estimates are used in turn to examine the efficiency of stations selected by the central electricity board to supply the national grid the results imply that a decentralized system was not only feasible but that the selection procedure was sensitive to efficiency differences at plant level copyright 1992 by royal economic society

substitution possibilities for unpriced natural resources restricted cost functions for the canadian metal mining industry a bstract the effects of resource depletion on economic growth depend critically on the elasticities of substitution between non renewable natural resources and reproducible inputs estimation of the elasticities of substitution for natural resources has been hindered by the absence of data on their prices which results from the prevalence of vertical integration in natural resource industries in this paper we use the theory of restricted cost functions to develop a general procedure for estimating substitution possibilities for unpriced inputs estimation of the model with data for the canadian metal mining industry indicates that the elasticities of substitution for the natural resource metallic ore are equal to unity

cost structure and technological change of local public transport the kaohsiung city bus case this study has developed a translog cost function for the kaohsiung city bus kcb to analyse its cost structure and economic characteristics based on monthly data over the time period from january 1996 to december 2000 the empirical results reveal that economies of density in the provision of bus services in kaohsiung do prevail the estimated marginal cost which is less than the average cost but greater than the current bus fare indicates that the subsidy is necessary due to the existence of returns to density rtd the kcb could obtain cost saving benefits by extending its output scale the kcb production technology is also not neutral the effects of technological change on the kcb costs suggest that over the period 1996 2000 technological progress did lead to cost saving the pure productivity growth rate increased from 0 45 in 1998 to 3 in 2000

unilateral divorce versus child custody and child support in the u s this paper explores the response of the divorce rate to law reforms introducing unilateral divorce after controlling for law reforms concerning the aftermath of divorce which are omitted from most previous studies we introduce two main policy changes that have swept the us since the late 1970s the approval of the joint custody regime and the child support enforcement program because those reforms affect divorce decisions by counteracting the reallocation of property rights generated by the unilateral divorce procedure and by increasing the expected financial costs of divorce it is arguable that their omissions might obscure the impact of unilateral divorce reforms on divorce rates after allowing for changes in laws concerning the aftermath of divorce we find that the positive impact of unilateral divorce reforms on divorce rates does not vanish over time suggesting that the coase theorem may not apply to changes in divorce laws supplemental analysis developed to examine the frequency of permanent shocks in us divorce rates indicates that the positive permanent changes in divorce rates can be associated with the implementation of unilateral divorce reforms and that the negative permanent changes can be related to the law reforms concerning living arrangements in the aftermath of divorce this seems to confirm the important role of these policies in the evolution of divorce rates

spillovers from publicly financed r d capital in high tech industries abstract this paper employs a dynamic production model to examine the short run effects of publicly financed r d capital on the cost structure of six high tech us manufacturing industries the results show that given an industry s output publicly financed r d capital reduces the variable production cost in all industries in addition an increase in publicly financed r d causes output to increase implying that producers as well consumers are better off despite the presence of strong monopoly power in some industries a low bound for the social rate of return to publicly financed r d is also calculated

productivity growth and incentive regulation in austria s gas distribution abstract the projected rate of productivity growth is the critical determinant of the price cap in incentive regulation however the regulatory authorities generally lack sophisticated industry tfp studies to set an optimal cap we thus estimate productivity growth in the austrian gas distribution sector in a translog cost function framework a key feature is our unique panel database on costs and outputs of regulated utilities for the period 2002 2013 covering six years prior and during incentive regulation as introduced in 2008 we find a modest tfp growth rate in the early sample years followed by a decline to zero or even slightly negative rates in recent years we also find a significant potential for returns to scale which is left unexploited indicating that utilities could significantly save on costs by merging as essential investments have already been undertaken in the past opportunities for technological progress seem to be limited in recent years

estimating and decomposing the rate of technical change in the swedish pulp and paper industry a general index approach abstract the purpose of this paper is to analyse the rate and the impacts of technical change in the swedish pulp and paper industry in contrast to earlier research on this industry we replace the standard time trend with time specific dummy variables enabling the estimation and decomposing of a general index of technical change the analysis is made within a translog cost function model which is estimated using a panel data set with observations across individual paper and board mills over the time period 1974 1994 our results indicate that the highest rates of technical change have generally occurred during the latter part of this period pure technical change is the primary component that has directed technical change over the entire time period we also find evidence of non neutral technical change energy use has been stimulated by technical improvements while labour use has been discouraged also technical change has had wastepaper and woodpulp using impacts however the magnitudes of these latter impacts are relatively small implying that the increase in wastepaper use during the last decades has mainly been stimulated by relative price changes

measuring embodied technical change in the us local telephone industry this study attempts to measure the rate of embodied technical change by using a short run variable cost function that contains arguments for labour and capital quality in this short run variable cost model the expansion of the amount of physical capital increases variable costs due to more maintenance outlays and then it leads to improvements in capital quality when a measure of competition is included as a proxy for organizational efficiency improvements in labour and capital quality explain more than two thirds of productivity growth the degree of returns to scale and the shadow cost of capital input in the embodiment cost model are presented as well the study is based on pooled time series and cross section data of eight us local exchange carriers

productivity scale economies and technical change reconsidered recently several writers have presented theoretical arguments and empirical evidence that suggests that an electric utility s long run productivity growth rate can be decomposed into a variety of factors for example gollop and roberts 12 decompose a utility s total factor productivity growth rate into three distinct components 1 technical change 2 a scale effect and 3 an environmental regulatory factor results for the 1970s indicate that declining rates of technical change and output growth coupled with increased regulatory intensity lead to a noticeable decline in the firm s long run productivity growth rate similarly nelson and wohar 15 examine the impact of technical change scale economies and rate of return regulation on an electric utility s longrun productivity growth rate evidence suggests that the technical change and scale components behaved in a manner similar to the gollop and roberts 12 findings the evidence concerning the impact of the regulatory factor was less convincing due to the difficulty in obtaining reliable estimates of the regulatory constraint parameter a common characteristic of this literature is that the firms under investigation are assumed to employ all inputs at their long run cost minimizing levels as such the productivity decomposition model is primarily concerned with distinguishing between shifts in the production function versus movements along the production structure according to caves christensen and swanson 5 a violation of the long run equilibrium assumption adds an equally important factor to the decomposition of productivity growth specifically the movement toward or away from longrun equilibrium as a consequence researchers must further distinguish between long run and short run productivity growth estimates 2 in a recent article 9 daly and rao illustrate theoretically and empirically using a long run cost function and data pertaining to ontario hydro that a firm s long run productivity growth rate can be decomposed into 1 technical change 2 non constant returns to scale and 3 a capacity

the impact of environmental regulations on industry productivity direct and indirect effects abstract the paper develops an approach to measuring the impact of environmental regulations on total factor productivity growth which is less restrictive than a simple growth accounting approach environmental regulations have a direct impact on productivity growth due to the diversion of resources toward required abatement capital there can be a further indirect effect however as conventional inputs and production processes are changed in response to requirements to purchase abatement capital we estimate this indirect effect using a flexible functional form cost function total factor productivity and the direct and indirect productivity effects of environmental regulations are presented for five polluting industries we find that the indirect effect can be either positive or negative and in all industries is energy using the net impact of environmental regulations on total factor productivity growth is fairly small given that these are the most polluting industries they account for about 10 30 of the productivity decline of the 1970s in these industries

capacity utilization and its determinants for a container shipping line theory and evidence under utilization of fleet capacity appears to be a long lasting issue in the container shipping industry also there are some difficulties unsolved while measuring the ratio of capacity utilization cu of a container shipping line from the perspective of an engineering approach the slots capacity installed is the most popular way to represent the capacity output since the slots capacity installed lacks theoretical support this study adopts an economics model to find the capacity output of a shipping line further the derived cu ratio identifies the realized utilization of fleet capacity for a shipping line focused on the three largest container shipping lines in taiwan this article shows that their fleet capacity are totally under utilized and the movement patterns of cu ratios are approximately identical in addition the variations of cu ratios also suggest that the enactment of ocean shipping reform act has contributed a positive effect on the capacity utilization of a container shipping line