an environmental performance index for products reflecting damage costs abstract several studies have demonstrated how to use dea data envelopment analysis based techniques to estimate environmental performance indices none of these studies however are taking information on the environmental damage costs of the pressure types considered into account this study is bridging a gap between environmental indices founded in physical pressures and damage costs founded in welfare economics the aim of the paper is twofold first to demonstrate how to implement the information on environmental damage costs within a dea based environmental performance index and second to estimate these indices at product level by using danish input output data and environmental data from 1997

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

foreign ownership and the theory of trade and welfare some standard topics in the theory of international trade are reconsidered in this paper by distinguishing between national and aggregate income when fixed supplies of foreign inputs are present within the home country under conditions that would ensure a national welfare gain if foreign ownership were absent international transfer economic growth or tariff policy might cause a national welfare loss in the presence of foreign ownership the techniques developed could be applied to other domestic distinctions such as those based on race sex age or ethnicity and to the theory of customs unions in a three country world

ranking trade resistance variables using data envelopment analysis abstract in the context of justus von liebig s law of the minimum this study assesses the impacts that trade barriers have on trade resistance between united states u s manufacturing industries and their trade partners an undesirable trade resistance model is presented where trade barriers are undesirable inputs into the production of the undesirable output trade resistance it is then presented how johansen s notion of capacity is utilized to assess trade barriers impacts estimation takes place by employing data envelopment analysis dea results suggest that u s trade partners port logistics are the most limiting trade barrier for the u s manufacturing industries followed by the distance between the u s and its trade partners the tariff imposed by the u s and the tariff imposed by the trading partner

measuring and assessing capacity utilization in the manufacturing sectors of nine oecd countries following a tradition established by cassels klein and hickman we employ the economic theory of cost and production and define economic capacity output as that output at which short and long run average total cost curves are tangent to one another capacity utilization cu rates are then computed as the ratio of actual to capacity output we implement this framework empirically by specifying and estimating a translog variable cost function for the manufacturing sectors of nine oecd countries we find that by the end of the historical sample the early 1980s pervasive and chronic excess capacity exists while the average cost consequence of excess capacity was relatively modest in the 1960s the burden increased considerably after opec i and after opec ii the premium was as large as 15 of average total costs we also find that electricity and fuel price increases had small impacts on capacity output relative to that from labor or capital finally we adjust conventional measures of multifactor productivity growth for changes in cu and find that the adjusted growth is larger after 1973 than that based on traditional procedures

nonparametric measures of scale economies and capacity utilization an application to u s manufacturing abstract an economic measure of scale efficiency is the ratio of the minimum average cost to the average cost at the actual output level of a firm it is easily measured by the ratio of the total cost of this output under the constant and variable returns to scale assumptions this procedure does not identify the output level where the average cost reaches a minimum this paper proposes a nonparametric method of measuring this output level using dea the relation between this efficient production scale the short run physical capacity output and the most productive scale size mpss is also discussed an empirical application using state level data from u s manufacturing is used to illustrate the procedure the dea findings are further analyzed using a smoothed bootstrap procedure

on the economic architecture of the workplace repercussions of social comparisons among heterogeneous workers we analyze the impact on a firm s profits and optimal wage rates and on the distribution of workers earnings when workers compare their earnings with those of coworkers we consider a low productivity worker who receives lower wage earnings than a high productivity worker when the low productivity worker derives dis utility not only from his own effort but also from comparing his earnings with those of the high productivity worker his response to the sensing of relative deprivation is to increase the optimal level of effort consequently the firm s profits are higher its wage rates remain unchanged and the distribution of earnings is compressed

degree of scale economies and congestion a unified dea approach abstract there are increasing concerns about how increase in congestion can adversely affect output as well as about the relative benefit cost ratio or return on investment associated with alternative projects or policies to address those problems regardless of what policy strategies are used to address congestion the fact remains that we cannot assess the economic benefits of congestion reduction strategies unless we are able to measure the extent to which congestion affects productivity in general and scale economies in particular this paper makes a novel attempt to suggest a method in a non parametric framework to measure scale elasticity in production in the presence of congestion

peer pressure and partnerships partnerships and profit sharing are often claimed to motivate workers by giving them a share of the pie but in organizations of any significant size the free rider effects would seem to choke off

efficiency analysis for exogenously fixed inputs and outputs we evaluate by means of mathematical programming formulations the relative technical and scale efficiencies of decision making units dmus when some of the inputs or outputs are exogenously fixed and beyond the discretionary control of dmu managers this approach further develops the work on efficiency evaluation and on estimation of efficient production frontiers known as data envelopment analysis dea we also employ the model to provide efficient input and output targets for dmu managers in a way that specifically accounts for the fixed nature of some of the inputs or outputs we illustrate the approach using real data for a network of fast food restaurants

long and short run non parametric cost frontier efficiency an application to spanish savings banks the utilisation rate of installed capacity is a popular concept in both the performance appraisal literature and in publications on industrial organisation however a common consensus has yet to be reached concerning the most appropriate way to measure the capacity utilisation of physical inputs and its final effect on company results on the one hand there are approaches that establish capacity utilisation with reference to the maximum level of production that can be achieved in contrast there are other approaches more strictly related to economic analysis of operating costs in this paper our main objective is to define an analytical process that uses non parametric frontier methodology to provide the distance between the total costs of a given unit and the short run frontier costs as a natural extension of this proposal it is possible to compute the short run inefficiency caused by a non optimal dimension of the fixed inputs we define this as capacityefficiency the proposed evaluation process is applied to spanish savings banks covering the period between 1986 and 1995 throughout the period analysed the greater part of cost inefficiency is due to capacity efficiency 2002 elsevier science b v all rights reserved

measuring and decomposing profit inefficiency through the slacks based measure abstract the slacks based measure was introduced by tone 2001 in order to estimate technical efficiency in the input output space by taking into account all sources of technical inefficiency and satisfying at the same time many interesting properties since then the slacks based measure has attracted the interest of numerous researchers and practitioners the slacks based measure has been applied to technical efficiency determination productivity change measurement the analysis of production process performance consisting of networks and so on however so far the slacks based measure has not been directly related to profit inefficiency as a component of the overall economic performance of firms in this note we show how a specific normalized measure of profit inefficiency may be decomposed through the slacks based measure

on the economic interpretation and measurement of optimal capacity utilization with anticipatory expectations this study builds on recent research giving the notion of capacity utilization clearer economic foundations in this research optimal output ye is defined as the minimum point on the firm s short run average total cost curve and capacity utilization is then computed as cu y y where y is actual output here i extend these concepts to include adjustment costs due to changes in the stock of capital and nonstatic expectations of future output demand and input prices the more general notion of cu is shown to depend on the shadow values of the firm s quasi fixed inputs and is decomposed to isolate the effects of anticipatory expectations an empirical comparison is then made between traditional indices and alternative economic cu measures using annual u s manufacturing data 1954 1980 the calculated indices exhibit plausible patterns which can be interpreted as the effects of nonstatic expectations and adjustment costs

some models for estimating technical and scale inefficiencies in data envelopment analysis in management contexts mathematical programming is usually used to evaluate a collection of possible alternative courses of action en route to selecting one which is best in this capacity mathematical programming serves as a planning aid to management data envelopment analysis reverses this role and employs mathematical programming to obtain ex post facto evaluations of the relative efficiency of management accomplishments however they may have been planned or executed mathematical programming is thereby extended for use as a tool for control and evaluation of past accomplishments as well as a tool to aid in planning future activities the ccr ratio form introduced by charnes cooper and rhodes as part of their data envelopment analysis approach comprehends both technical and scale inefficiencies via the optimal value of the ratio form as obtained directly from the data without requiring a priori specification of weights and or explicit delineation of assumed functional forms of relations between inputs and outputs a separation into technical and scale efficiencies is accomplished by the methods developed in this paper without altering the latter conditions for use of dea directly on observational data technical inefficiencies are identified with failures to achieve best possible output levels and or usage of excessive amounts of inputs methods for identifying and correcting the magnitudes of these inefficiencies as supplied in prior work are illustrated in the present paper a new separate variable is introduced which makes it possible to determine whether operations were conducted in regions of increasing constant or decreasing returns to scale in multiple input and multiple output situations the results are discussed and related not only to classical single output economics but also to more modern versions of economics which are identified with contestable market theories

agriculture s environmental externalities dea evidence for french agriculture the existence of persistent technical inefficiency offers the opportunity for a free lunch not typically implied by the neoclassical theory of the firm when external effects are related to the use of particular inputs reduction of persistent technically inefficient levels of input use represents a means of reducing external impacts an important example is found in agriculture where substantial environmental impacts are generated by particular inputs within this context this paper considers the usefulness of data envelopment analysis dea for estimation of potential input reductions and assessment of potential reductions of environmental impacts of agricultural inputs an application for french cereal production provides estimates that indicate that substantial potential exists for reduction of input use and environmental impacts

agricultural productivity of the spanish regions a non parametric malmquist analysis productivity growth for the agricultural sectors of the 17 spanish regions over the period 1977 88 is studied using non parametric programming techniques productivity changes based on conventional inputs are linked to other economic geographic and institutional issues average technical change in the spanish regions grew at an annual rate of 2 9 but with great regional variation this paper presents a clear characterization of areas with greater technical progress and the regions with technical regress

cost revenue and profit efficiency measurement in dea a directional distance function approach abstract estimation of efficiency of firms in a non competitive market characterized by heterogeneous inputs and outputs along with their varying prices is questionable when factor based technology sets are used in data envelopment analysis dea in this scenario a value based technology becomes an appropriate reference technology against which efficiency can be assessed in this contribution the value based models of tone 2002 are extended in a directional dea set up to develop new directional cost and revenue based measures of efficiency which are then decomposed into their respective directional value based technical and allocative efficiencies these new directional value based measures are more general and include the existing value based measures as special cases these measures satisfy several desirable properties of an ideal efficiency measure these new measures are advantageous over the existing ones in terms of 1 their ability to satisfy the most important property of translation invariance 2 choices over the use of suitable direction vectors in handling negative data and 3 flexibility in providing the decision makers with the option of specifying preferable direction vectors to incorporate their preferences finally under the condition of no prior unit price information a directional value based measure of profit inefficiency is developed for firms whose underlying objectives are profit maximization for an illustrative empirical application our new measures are applied to a real life data set of 50 us banks to draw inferences about the production correspondence of banking industry

school choice and segregation evidence from an admission reform we evaluate the effects of school choice on segregation using data from an admission reform in the stockholm upper secondary schools before 2000 the students were assigned to their nearest school but from the fall of 2000 the students can apply to any school within stockholm and admission decisions are solely based on grades as expected the new admission policy increased segregation by ability however segregation by family background and especially segregation between immigrants and natives also increased significantly the increase in segregation by family background can be explained by ability sorting but the increase in ethnic segregation can not

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

moving to opportunity in boston early results of a randomized mobility experiment this paper examines the short run impacts of a change in residential neighborhood on the well being of low income families using evidence from a program in which eligibility for a housing voucher was determined by random lottery we examine the experiences of households at the boston site of moving to opportunity mto a demonstration program in five cities families in high poverty public housing projects applied to mto and were assigned by lottery to one of three groups experimental offered mobility counseling and a section 8 subsidy valid only in a census tract with a poverty rate of less than 10 percent section 8 comparison offered a geographically unrestricted section 8 subsidy or control offered no new assistance but continued to be eligible for public housing our quantitative analyses of program impacts uses data on 540 families from a baseline survey at program enrollment a follow up survey administered l to 3 5 years after random assignment and state administrative data on earnings and welfare receipt 48 percent of the experimental group and 62 percent of the section 8 comparison group moved through the mto program one to three years after program entry families in both treatment groups were more likely to be residing in neighborhoods with low poverty rates and high education levels than were families in the control group however while members of the experimental group were much more likely to be residing in suburban communities than were those in the section 8 group the lower program take up rate among the experimental group resulted in more families remaining in the most distressed communities households in both treatment groups experienced improvements in multiple measures of well being relative to the control group including increased safety improved health among household heads and fewer behavior problems among boys experimental group children were also less likely to be a victim of a personal crime to be injured or to experience an asthma attack there are no significant impacts of either mto treatment on the employment earnings or welfare receipt of household heads in the first three years after random assignment

alternative measures of environmental technology structure in dea an application abstract the nonparametric data envelopment analysis dea literature on environmental efficiency ee considers handling undesirable outputs in two alternative ways either in their original forms with the assumption that these are weakly disposable or in various translated forms with the assumption that these are strongly disposable choosing a particular approach implies adoption of a particular distinct treatment of undesirable outputs and hence yields a distinct set of ee estimates to explore the effects of the interplay between choice of ee measure and specific treatment of undesirable outputs this paper attempts to generate all possible output oriented ee measures based on these two alternative approaches furthermore guided by the argument that slacks are important in identifying properly the efficiency behavior of firms it proposes two new alternative slacks based formulations of ee one based on the range directional model and the other on the generalized proportional distance function model using a confected data set of ten firms and a real life data set of 22 oecd countries our empirical analysis reveals that first ee scores are influenced not only by the choice of disposability assumption for undesirable outputs but also by the way these are treated in various translated forms second the choice of any particular treatment of undesirable outputs plays no role in influencing the rankings of firms and third our two new alternative ee formulations are at the least viable alternatives to existing ee measures in ranking firms according to their eco efficiency behavior

gender and competition at a young age gender gaps may be observed in a variety of economic and social environments one of the possible determining factors is that men are more competitive than women and so when the competitiveness of the environment increases the performance of men increases relative to that of women we test this hypothesis in a field study conducted with 9 year old children running on a track they first run alone and then in pairs over a short distance with different gender composition of the pairs the results support the hypothesis that performance in competition varies according to gender when children ran alone there was no difference in performance in competition boys but not girls improved their performance this finding relates to the discussion regarding single sex schools the outcomes of examinations in a mixed sex school can show a gender gap in favor of boys even when this gap does not reflect actual abilities girls who are as talented as boys will end up performing worse just because they are not as competitive and will not achieve as high scores in examinations as boys

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

crime in the lab detecting social interaction abstract according to the standard economic perspective criminal activities vary with the price of crime which depends on the severity of punishment and the detection probability an alternative view claims that crime is also influenced by social interaction phenomena such as peer pressure or neighbourhood effects detecting social interaction in the field is fraught with difficulties however in this paper we argue that given its extensive control possibilities experiments are well suited to show the potential existence of social interaction effects we present an experimental study where people can engage in criminal activities we find support for the importance of social interaction on average subjects steal the more the more others steal this behaviour can be interpreted in terms of reciprocity

optimal design of social comparison effects setting reference groups and reference points in this paper we study how social planners should exploit social comparisons to pursue their objectives we consider two modes of social comparison referred to as behind averse and ahead seeking behaviors depending on whether individuals experience a utility loss from underperforming or a utility gain from overperforming relative to their peers modeling social comparison as a game between players we find that ahead seeking behavior leads to output polarization whereas behind averse behavior leads to output clustering a social planner can mitigate these effects in two ways i by providing the full reference distribution of outputs instead of an aggregate reference point based on the average output and ii by assigning players into uniform rather than diverse reference groups social planners may thus need to tailor the reference structure to the predominant mode of social comparison and their objective a performance focused social planner may set the reference structure so as to maximize the output of either the top or the bottom player depending on whether she puts greater marginal weight to larger or smaller outputs when the social planner also cares about utility she faces a dilemma because performance optimization may not be aligned with utility maximization inevitably the social planner will have to confront equity issues because better performance may not reflect greater effort or greater ability this paper was accepted by serguei netessine operations management

economic versus environmental improvement potentials of danish pig farms this article demonstrates how economic and environmental improvement potentials of danish pig farms can be estimated using data envelopment analysis dea to avoid some of the problems associated with the definition of undesirable outputs environmental variables are included as nutrients applied with manure and nutrients removed with the crops these environmental variables are combined with a series of economic variables including the costs of fertilizer furthermore subvector efficiency and a two step analysis are used in order to consider economic and environmental technical efficiency separately the empirical results show considerable improvement potentials especially on the environmental variables sensitivity studies validate that these results are robust to possible uncertainties in the measurement of the environmental variables

do professionals choke under pressure high rewards or the threat of severe punishment provide strong motivation but also create psychological pressure which might induce performance decrements by analyzing the performance of professional football players in penalty kick situations the paper provides empirical evidence for the existence of detrimental incentive effects two pressure variables are considered in particular 1 the importance of success and 2 the presence of spectators there are plenty of situations in which pressure arises in the workplace knowing how individuals perform under pressure conditions is crucial because it has implications for the design of the workplace and the design of incentive schemes

peers at work we study peer effects in the workplace specifically we investigate whether how and why the productivity of a worker depends on the productivity of coworkers in the same team using high frequency data on worker productivity from a large supermarket chain we find strong evidence of positive productiv ity spillovers from the introduction of highly productive personnel into a shift worker effort is positively related to the productivity of workers who see him but not workers who do not see him additionally workers respond more to the presence of coworkers with whom they frequently interact we conclude that social pressure can partially internalize free riding externalities that are built into many workplaces jel j24 l81 m54

sugar beet for bioethanol production an approach based on environmental agricultural outputs abstract the eu imports both bioethanol and the raw material needed to produce it thirty percent of bioethanol is produced from sugar beets in the eu however sugar beet cultivated area and yields have fallen due to the 2006 sugar regime reform given the potential uncertainty about the future for sugar beet farmers biofuels may represent an alternative market this paper analyses potential contribution to the efficiency in terms of environmental output of the sugar beet crop both when production is oriented toward bioethanol and regarding the use of input an empirical application is performed in spain by data envelopment analysis dea the results show that 4 of farms have full technical efficiency while the rest have an average efficiency of 55 9 the figures show that inputs can be reduced over 40 and also show the low average level of input use efficiency in addition it cannot be said that there is a relationship between efficiency and farm scale the consideration of aspects such as the environmental advantages of using sugar beet production for bioethanol can open new lines of action to support this crop in the eu in addition boosting sugar beet production may reduce potential dependency on importation

quitters never win the adverse incentive effects of competing with superstars internal competition may motivate worker effort yet the benefits of competition may depend critically on workers relative abilities large skill differences may reduce efforts i use panel data from professional golf tournaments and find that the presence of a superstar is associated with lower performance on average golfers first round scores are approximately 0 2 strokes worse when tiger woods participates relative to when woods is absent the overall tournament effect is 0 8 strokes the adverse superstar effect varies with the quality of woods s play there is no evidence that reduced performance is attributable to media attention intensity or risky strategy adoption

can losing lead to winning individuals groups and teams who are behind their opponents in competition tend to be more likely to lose in contrast we show that through increasing motivation being slightly behind can actually increase success analysis of more than 18 000 professional basketball games illustrates that being slightly behind at halftime leads to a discontinuous increase in winning percentage teams behind by a point at halftime for example actually win more often than teams ahead by one or approximately six percentage points more often than expected this psychological effect is roughly half the size of the proverbial home team advantage analysis of more than 45 000 collegiate basketball games finds consistent though smaller results experiments corroborate the field data and generalize their findings providing direct causal evidence that being slightly behind increases effort and casting doubt on alternative explanations for the results taken together these findings illustrate that losing can sometimes lead to winning this paper was accepted by peter wakker decision analysis

an alternative approach to monetary aggregation in dea this paper proposes a set of alternative dea based money indices that are proved to be both theoretically and empirically competing monetary aggregates since they perform as good as the divisia aggregates based on all the results concerning causality forecasting and money demand we conclude that dea money aggregates prove to be at least competing alternatives to the divisia aggregates and hence suggest that these new aggregates may be considered along with the existing weighted monetary aggregates like the divisia ones given the inherent benefit of the doubt weighting mechanism underlying the dea models where the optimal weight assigned by dea to each monetary asset reflects the ongoing financial innovation and the reserve bank of india s policy priority in the distribution of total liquidity we feel that the dea money indices can truly capture the liquidity better with ongoing financial innovations in the economy

crime and social interactions the high variance of crime rates across time and space is one of the oldest puzzles in the social sciences this variance appears too high to be explained by changes in the exogenous costs and benefits of crime we present a model where social interactions create enough covariance across individuals to explain the high cross city variance of crime rates this model provides an index of social interactions which suggests that the amount of social interactions is highest in petty crimes moderate in more serious crimes and almost negligible in murder and rape

tournaments without prizes evidence from personnel records we use a quasi experimental research design to study the effect of giving workers feedback on their relative performance the setting is a firm in which workers are paid piece rates and where for exogenous reasons management begins to reveal to workers their relative position in the distribution of pay and productivity we find that merely providing this information leads to a large and long lasting increase in productivity that is costless to the firm our findings are consistent with the interpretation that workers incipient concerns about their relative standing are activated by information about how they are performing relative to others this paper was accepted by olav sorenson organizations

in search of workers real effort reciprocity a field and a laboratory experiment we present a field experiment to assess the effect of own and peer wage variations on actual work effort of employees with hourly wages work effort neither reacts to an increase of the own wage nor to a positive or negative peer comparison this result seems at odds with numerous laboratory experiments that show a clear own wage sensitivity on effort in an additional real effort laboratory experiment we show that explicit cost and surplus information that enables an exact calculation of an employer s surplus from the work contract is a crucial prerequisite for a positive wage effort relation this demonstrates that an employee s reciprocity requires a clear assessment of the surplus at stake jel c91 c92 j41

who determines mexican trade policy using a political economy approach the authors analyze the pattern of protection in mexico s manufacturing sector during the period of trade policy reforms 1985 89 when mexico experienced significant trade liberalization and an important inflow of foreign direct investment they take into account the potential effect of foreign direct investment on endogenous tariff formation it turns out that the data support this analytic approach in which the formulation of trade policy reflects political support and in which the presence of foreign direct investment in the sector strongly affects the pattern of tariff protection before and after reform in mexican manufacturing especially sectors with heavy foreign direct investment received greater protection in import competing sectors although the move toward greater openness was associated with a reduction in the influence of industrial and foreign investor lobbying

radial and non radial decompositions of profit change with an application to indian banking abstract grifell tatje and lovell grifell tatje e lovell c a k 1999 profits and productivity management science 45 1177 1193 made significant contributions to the literature on the extended radial dea framework by decomposing profit change into six mutually exclusive components their approach however poses two basic problems first the radial estimates on these components might give conflicting signals about the direction of profit change after the full radial efficiencies are achieved when slacks are present second evaluations of these components using base period prices as weights can be potentially misleading to address these concerns we first introduce non radial dea models and then provide a few strong theoretical arguments in favor of using as weights either current period prices or an average price covering both periods to value the contributions of each of these components the indian banking sector is taken as a case study to illustrate the radial and non radial decompositions of profit change so as to empirically examine the role of competition on profit change and its drivers our broad empirical results are as follows first radial and non radial models yield diametrically opposite results on the contributions of various components second the increasing efficiency change trends in all ownership groups after 2002 indicate that the government reform process instituted on the banking industry has had a favorable effect on the performance of the indian banking sector third despite the fact that nationalized banks are the oldest banks their output and resource allocation behaviors do not reflect their learning experience

work environment and individual background explaining regional shirking differentials in a large italian firm the prevalence of shirking within a large italian bank appears to be characterized by significant regional differentials in particular absenteeism and misconduct episodes are substantially more prevalent in the south we consider a number of potential explanations for this fact different individual backgrounds group interaction effects sorting of workers across regions differences in local attributes different hiring policies and discrimination against southern workers our analysis suggests that individual backgrounds group interaction effects and sorting effects contribute to explaining the north south shirking differential none of the other explanations appears to be of first order importance i introduction whether individual behavior is determined by group interactions or by individual background is undoubtedly a fundamental question for the social sciences this question presented itself forcefully when we stumbled onto the following piece of evidence there appear to be significant regional differentials in the prevalence of shirking among the employees of a large italian bank in particular absenteeism and misconduct episodes are considerably more frequent in the southern branches of the bank in this paper we examine several potential explanations for this fact first individual preferences for shirking versus working may differ according to one s region of hirth we will refer to this hj othesis as one of different individual hackgrounds the second possibility is one of locational sorting low shirking types may tend to migrate to the north high shirking types may tend to migrate to the south or hoth third the northern and southern

radial and non radial decompositions of luenberger productivity indicator with an illustrative application abstract viewing slacks as one possible source of inefficiency and that inputs have differential importance in the production process this paper develops based on the directional russell measure of inefficiency the non radial luenberger indicator this indicator is then shown as the sum of the individual input specific luenberger indicators the luenberger indicator and its various input specific indicators are also then shown as the composite measure of efficiency change and technical change this decomposition enables the researcher to empirically examine the contributions of each factor input towards the productivity change and its components efficiency change and technical change our proposed decomposition scheme is then empirically illustrated to analyze the eco productivity performance behavior of the 22 oecd countries during the period 1995 2004 our results indicate that first the productivity change estimates yielded from the non radial luenberger indicator are different from those yielded from its radial counterpart when slacks are present second most of these countries are found experiencing productivity growth due to technical progress alone and finally as regards the order of input specific contributions towards productivity growth capital contributes the most followed by savings in emissions and labor respectively

indian bank efficiency and productivity changes with undesirable outputs a disaggregated approach the objective of this study is to examine technical efficiency and productivity growth in the indian banking sector over the period from 2004 to 2011 we apply an innovative methodological approach introduced by chen et al 2011 and barros et al 2012 who use a weighted russell directional distance model to measure technical inefficiency we further modify and extend that model to measure tfp change with npls we find that the inefficiency levels are significantly different among the three ownership structure of banks in india foreign banks have strong market position in india and they pull the production frontier in a more efficient direction spbs and domestic private banks show considerably higher inefficiency we conclude that the restructuring policy applied in the late 1990s and early 2000s by the indian government has not had a long lasting effect

disappointment aversion and social comparisons in a real effort competition we present an experiment to investigate the source of disappointment aversion in a sequential real effort competition specifically we study the contribution of social comparison effects to the disappointment aversion previously identified in a two person real effort competition gill d and v prowse a structural analysis of disappointment aversion in a real effort competition american economic review 102 2012 469 503 to do this we compare social and asocial versions of the gill and prowse experiment where the latter treatment removes the scope for social comparisons if disappointment aversion simply reflects an asymmetric evaluation of losses and gains we would expect it to survive in our asocial treatment alternatively if losing to or winning against another person affects the evaluation of losses gains as we show would be theoretically the case under asymmetric inequality aversion we would expect treatment differences we find behavior in social and asocial treatments to be similar suggesting that social comparisons have little impact in this setting unlike in gill and prowse we do not find evidence of disappointment aversion jel c91 d12 d81 d84

international regulations and environmental performance this article employs the data envelopment analysis dea approach to compute the environmental performance of all but two organisation for economic co operation and development oecd countries it is found that although the environmental performance of countries differs over time poland and hungary are the two best performers for all periods while italy japan austria and switzerland are ranked among the worst the effect of international regulations and some observed characteristics of countries on environmental performance are also investigated international regulations are reported to have a positive effect on environmental performance

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

monitoring motivation and management the determinants of opportunistic behavior in a field experiment economic models of incentives in employment relationships are based on a specific theory of motivation employees are rational cheaters who anticipate the consequences of their actions and shirk when the marginal benefits exceed costs we investigate the rational cheater model by observing how experimentally induced variation in monitoring of telephone call center employees influences opportunism a significant fraction of employees behave as the rational cheater model predicts a substantial proportion of employees however do not respond to manipulations in the monitoring rate this heterogeneity is related to variation in employee assessments of their general treatment by the employer jel d2 j2 l2 l8 m12

ownership versus competition efficiency in public enterprise certainly the introduction of product market competition into potentially competitive or at least contestable markets can improve performance to take just one example morrison and whinston 1986 1986 estimate that even in the imperfectly contestable u s airline industry the annual u s welfare gains from deregulation have been around 6 billion

prosocial behavior private contributions to agriculture s impact on the environment private provision of public environmental benefits is considered with a theory of prosocial behavior that elaborates the roles of nonhedonistic values held by agents as well as the functional interaction between private good and public good production processes the theory also identifies the conditions under which public environmental goods will be privately supplied and motivates an empirical approach models of environmental effort in agriculture are estimated based on a survey of u s field crop farmers results confirm the role of hedonistic motivation of environmental effort and provide very weak evidence of a role of nonhedonistic values

clean evidence on peer effects we study subjects who were asked to fill letters into envelopes with a remuneration independent of output in the pair treatment two subjects worked at the same time in the same room and peer effects were possible in the single treatment subjects worked alone and peer effects were ruled out we find evidence of peer effects in the pair treatment because the standard deviations of output are smaller within pairs than between pairs moreover average output is higher in the pair treatment thus peer effects raise productivity finally low productivity workers are the most sensitive to the behavior of peers

a measure of price advantage and its decomposition into output and input specific effects abstract in this paper we develop a price advantage measure obtained as the difference between efficiency scores computed with quantity based and value based data this measure is interpreted as an increase in the firm s profit rate due to a favourable input and output price environment compared to traditional allocative efficiency measure which uses only the evaluated firm s prices price advantage measure considers prices of peers in the market our main contribution is to show that total price advantage decomposes into the sum of output and input specific price advantages the application of the measure to a french farm s dataset in the context of the successive common agricultural policy reforms aiming at the liberalization of agricultural prices 1992 2013 illustrates our theoretical model

firm and industry level profit efficiency analysis using absolute and uniform shadow prices we discuss the nonparametric approach to profit efficiency analysis at the firm and industry levels in the absence of complete price information two new insights are developed first we measure profit inefficiency in monetary terms using absolute shadow prices second we evaluate all firms using the same input output prices this allows us to aggregate firm level profit inefficiencies to the overall industry inefficiency besides the measurement of profit losses the presented approach enables one to recover absolute price information from quantity data we conduct a series of monte carlo simulations to study the performance of the proposed approach in controlled production environments

factor movements and commodity trade as complements abstract several models are presented in which factor mobility leads to an increase in the volume of world trade the models share the common characteristic that the basis for trade is something other than differences in relative factor endowments these alternative bases for trade include returns to scale imperfect competition production and factor taxes and differences in production technology taken together the models suggest a more general idea the widely held notion that trade in goods and factors are substitutes is in fact a rather special result which is a general characteristic only of factor proportions models

peer effects among swimmers we develop a novel identification strategy and examine various aspects of peer effects using swimming data we find that the performance of adjacent competitors positively influences swimmers performances in particular swimmers are influenced by slower lane peers suggesting that being chased improves one s performance we use absenteeism data to directly compare the performances of swimmers with and without peers we have found that swimmers swim faster with peers swimming behind them than when swimming alone but that they swim slower with peers swimming ahead finally we find that observability is a key determinant of peer effects by comparing freestyle and backstroke competitions

network effects and welfare cultures we empirically examine the role of social networks in welfare participation using data on language spoken at home to better infer networks within an area our empirical strategy asks whether being surrounded by others who speak the same language increases welfare use more for those from high welfare using language groups this methodology allows us to include local area and language group fixed effects and to control for the direct effect of being surrounded by one s language group these controls eliminate many of the problems in previous studies the results strongly confirm the importance of networks in welfare participation

interactions between workers and the technology of production evidence from professional baseball this paper examines how the effort choices of workers within the same firm interact with each other in contrast to the existing literature we show that workers can affect the productivity of their co workers based on income maximization considerations rather than relying on behavioral considerations such as peer pressure social norms and shame theoretically we show that a worker s effort has a positive effect on the effort of co workers if they are complements in production and a negative effect if they are substitutes the theory is tested using panel data on the performance of baseball players from 1970 to 2003 the empirical analysis shows that a player s batting average significantly increases with the batting performance of his peers but decreases with the quality of the team s pitching furthermore a pitcher s performance increases with the pitching quality of his teammates but is unaffected by the batting output of the team these results are inconsistent with behavioral explanations which predict that shirking by any kind of worker will increase shirking by all fellow workers the results are consistent with the idea that the effort choices of workers interact in ways that are dependent on the technology of production these findings are robust to controlling for individual fixed effects and to using changes in the composition of one s co workers in order to produce exogenous variation in the performance of one s peers

tariff reductions under foreign factor ownership in the presence of foreign factor ownership the traditional welfare effects of tariff reforms have to be reconsidered to include income redistribution between national and foreign owned factors jagdish n bhagwati and richard a brecher 1980 showed that when the relative amount of foreign owned factors in the host country is sufficiently large to induce a change in the direction of the trade pattern immiserizing tariff reductions may occur here it is shown that in the mirror case when foreign owned factors tend to promote the existing trade pattern i e trade promoting similar results can be obtained on the other hand when foreign factors are trade substituting tariff reductions cannot be immiserizing

transparency inequity aversion and the dynamics of peer pressure in teams theory and evidence we provide an explanation for peer pressure in teams based on inequity aversion analyzing a two period model with two agents we find that the effect of inequity aversion strongly depends on the information structure when contributions are unobservable agents act as though they were purely selfish however when contributions are made transparent at an interim stage agents exert higher efforts in the first period and adjust their efforts according to the interim information in the second period this form of peer pressure reduces free riding and thus more efficient outcomes are attained the results are confirmed in a real effort experiment

random interactions in the chamber legislators behavior and political distance abstract i investigate the role of social interaction among members of parliament mps and the impact of such interaction on the political distance between parties using the random allocation of seats in the icelandic parliament i find that mp s voting and speech behaviors are affected by the behavior of legislators seated nearby i also show that greater random exposure to mps from different parties ultimately reduces the political distance between parties similar evidence is found using historical data for the u s house of representatives by exploiting the introduction of a lottery mechanism to determine desk assignments in 1845 i argue that random seating arrangements could constitute a low cost way of reducing differences within the political arena

estimating a bayesian stochastic frontier for the indian banking system abstract this paper employs a bayesian stochastic frontier providing exact inference on both cost and profit efficiencies of the indian banking sector in the period of 2000 2006 we also test for the inclusion of off balance sheet data in model specification the findings suggest that public banks are the most efficient followed by private and foreign banks however the latter largely improved profit efficiency outperforming domestic banks by the end of the sample accounting for off balance sheet activities significantly improves profit efficiency levels

identification of endogenous social effects the reflection problem this paper examines the reflection problem that arises when a researcher observing the distribution of behaviour in a population tries to infer whether the average behaviour in some group influences the behaviour of the individuals that comprise the group it is found that inference is not possible unless the researcher has prior information specifying the compisition of reference groups if this information is available the prospects for inference depend critically on the population relationship between the variables defining reference groups and those directly affecting outcomes inference is difficult to implossible if these variables are functionally dependent or are statistically independent the prospects are better if the variables defining reference groups and those directly affecting outcomes are moderately related in the population

an efficiency comparison of the non life insurance industry in the bric countries abstract we analyze the efficiency of non life insurance companies in four of the fastest growing markets in the world the bric brazil russia india china countries an innovative feature of this paper is its incorporation of uncontrollable variables in the efficiency analysis using multi stage data envelopment analysis dea this approach captures cross country differences such as the political and economic environment and allows distinguishing between managerial inefficiency and inefficiency due to environmental conditions we find that the environment affects the efficiency of non life insurers operating in the bric countries furthermore in a regression of firm characteristics on efficiency scores we identify four drives of efficiency size profitability solvency and ownership form the results further our understanding of the insurance industry in the bric countries in regard to its efficiency and the environment in which it operates

are workers willing to pay to join a better team using data from the major league baseball free agent market this study is the first to show that the productivity expected of the team a worker will join produces a significant negative compensating wage differential the younger workers in the sample drive this result trading 25 of their wages to join teams with an expected productivity one standard deviation higher this investment can be recouped if a reasonable increase in human capital occurs these results are robust to contract length wage simultaneity and indicate that investment in human capital motivates the observed tradeoff suggesting a new pathway through which human capital accumulation can affect wages reliable measures of workers own past productivity and the productivity expected of a worker s future team provide key advantages to identifying these effects jel j31 j24 m54

capacity utilisation and profitability a decomposition of short run profit efficiency the principal aim of this paper is to measure the amount by which the profit of a multi input multi output firm deviates from maximum short run profit and then to decompose this profit gap into components that are of practical use to managers in particular our interest is in the measurement of the contribution of unused capacity along with measures of technical inefficiency and allocative inefficiency in this profit gap we survey existing definitions of capacity and after discussing their shortcomings we propose a new ray economic capacity measure that involves short run profit maximisation with the output mix held constant we go on to describe how the gap between observed profit and maximum profit can be calculated and decomposed using linear programming methods the paper concludes with an empirical illustration involving data on 28 international airline companies the empirical results indicate that these airline companies achieve profit levels which are on average us 815m below potential levels and that 70 of the gap may be attributed to unused capacity

can farrell s allocative efficiency be generalized by the directional distance function approach abstract cost or revenue efficiency measurement based on the approach initiated by farrell has received great attention from academics and practitioners since the fifties farrell s approach decomposes cost efficiency into two different sources viz technical efficiency and allocative efficiency technical efficiency is estimated by means of the shephard input or output distance functions while allocative efficiency is derived as a residual between cost or revenue efficiency and its corresponding technical efficiency component the directional distance function ddf was introduced later in the literature to complete duality theory with respect to the profit function and as a generalization of the shephard input and output distance functions considering the case of cost efficiency we show that although the ddf correctly encompasses the technical efficiency component of the farrell approach this is not true for the allocative component we show that both approaches yield different allocative in efficiency terms unless technical efficiency is assumed and how these terms are related the practical implications of the multiplicative and additive approaches are discussed and illustrated

no excuses for good behavior volunteering and the social environment abstract we study the effect of the social environment on the quantity and quality of voluntary labor contributions by extending benabou and tirole s 2006 image signaling framework we derive theoretical predictions on time volunteered given 1 the availability of excuses to stop volunteering and 2 the presence of an authority figure we test these predictions in an experiment where laboratory subjects are directly involved in a local nonprofit operation we find that in the absence of excuses to stop volunteering subjects volunteer longer without working less productively this increase is partially driven by subjects reluctance to be the first to stop volunteering the presence of an authority figure has little impact but the presence of peers has a positive and significant impact

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

decomposing profit inefficiency in dea through the weighted additive model abstract an issue that has received little attention in the data envelopment analysis literature is the decomposition of profit inefficiency by means of measures that account all sources of technical inefficiency in this paper we introduce a new way to measure and decompose profit inefficiency through weighted additive models all our results are derived from a new fenchel mahler inequality using duality theory

energy productivity growth in the dutch greenhouse industry profitability of dutch greenhouse firms is largely dependent on energy costs and policy makers focus on reducing the use of energy by these firms this article uses russell measures of te to develop indicators of energy productivity growth results show that energy productivity grew by 2 8 annually in the period 1976 95 with technical progress being the key factor driving the process of productivity growth from this we conclude that policies aiming at enhancing the adoption of technological innovations are more effective if due attention is paid to measures for improving te

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

incentive systems in a real effort experiment in the reported experiment different payment schemes are examined on their incentive effects payments based on individual team and relative performance are compared subjects conducted computerized tasks that required substantial effort the results show that individual and team payment induced the same effort levels in team production free riding occurred but it was compensated by many subjects providing more effort than in case of individual pay effort was higher but more variable in tournaments while in case of varying abilities workers with relatively low ability worked very hard and drove up effort of the others finally attitudes towards work and other workers differed strongly between conditions

performance in competitive environments gender differences even though the provision of equal opportunities for men and women has been a priority in many countries large gender differences prevail in competitive high ranking positions suggested explanations include discrimination and differences in preferences and human capital in this paper we present experimental evidence in support of an additional factor women may be less effective than men in competitive environments even if they are able to perform similarly in non competitive environments in a laboratory experiment we observe as we increase the competitiveness of the environment a significant increase in performance for men but not for women this results in a significant gender gap in performance in tournaments while there is no gap when participants are paid according to piece rate this effect is stronger when women have to compete against men than in single sex competitive environments this suggests that women may be able to perform in competitive environments per se

reevaluating the role of trade agreements does investment globalization make the wto obsolete abstract international ownership alters the role of multilateral trade institutions by redefining pecuniary externalities among countries regardless of the underlying cause whether foreign direct investment international portfolio diversification cross country mergers or multinational firms international ownership can mitigate incentives that lead large countries to set inefficiently high tariffs at the same time however foreign ownership introduces the potential for expropriation by investment host countries which can extract rent from foreign owners by manipulating local prices the basic principle of reciprocity continues to serve as an important guide to efficiency though its application must account for the pattern of international ownership in addition to traditional measures of market access

does an endogenous relationship exist between environmental and economic performance a resource based view on the horticultural sector the aim of this paper is to analyse the relationship between environmental and economic performance from the resource based theory within firms of the fresh fruit and vegetables sector this study considers that the adoption of environment friendly practices has a greater influence on firms opportunities and abilities in the agricultural sector than in manufacturing sectors and leads to closer links between performance variables the reference for this empirical analysis is a panel data of horticultural farming marketing firms in spain the voluntary environmental programmes and the heterogeneity of their application lead us to regard acquiring a competitive advantage as a relevant driver to improve environmental performance in this sector a simultaneous equations model is suggested reflecting the differential environmental effect and the assumption of endogeneity among variables the results show a positive impact of environmental differentiation on profitability and market share also suggesting that the perception of this positive experience implies greater environmental performance

accounting for slacks to measure and decompose revenue efficiency in the spanish designation of origin wines with dea abstract in this paper we show how data envelopment analysis dea may be used to measure and decompose revenue inefficiency taking into account all sources of technical waste in the context of an application to assess the spanish quality wine sector in particular designation of origin do wines we try to go beyond the standard approaches which use shephard distance functions or directional distance functions to provide decomposition that incorporates slacks as a source of technical inefficiency to accomplish this we will base our analysis on a recent approach introduced in cooper et al 2011a in particular we show how an output oriented version of the weighted additive model can be used to properly identify revenue technical and allocative inefficiencies in spanish dos in the application we conclude that the main source of revenue inefficiency in this sector is technical waste and that cava can be highlighted as the do that performs as a benchmark for more numbers of units

the tradeoff between performance and quitting in high power tournaments tournaments may be characterized by the performance they induce as well as by the rate of quitting and dropouts of participants although most of the attention in the literature is on the performance induced by high power incentives there are many daily situations in which dropouts and quitting are a major concern using a field experiment in schools and a model of dynamic tournament we examine the effect of different levels of rewards on the rate of quitting our experiment indicates that there is a possible tradeoff between performance and quitting strong incentives tournaments induced participants to exert more effort and exhibit a better performance but at the same time it induces a higher rate of quitting we present a multi stage tournament model that gives rise to a similar characterization jel c93 c73 d8 j30

social interactions in high school lessons from an earthquake after an earthquake hit southern italy in 1980 young men from certain towns were exempted from compulsory military service we show that the exemption raised high school graduation rates of boys by more than 2 percentage points we do this by comparing high school graduation rates of young exempt men and older nonexempt men from the least damaged areas and men of the same age groups from nearby towns that were not hit by the quake similar comparisons show that graduation rates of young women in the affected areas also increased since in italy women are not subject to the draft the findings suggest the presence of spillover effects jel i21 j13