multinational operation ownership and efficiency differences in the international oil industry abstract although state involvement in market systems often leads to inefficiency this influence in the oil industry is not dwindling due to strong growth of some state oil companies based on this background there are concerns about how state firms can continue to stay relevant in the international oil industry by offsetting inefficiencies due to state control this study assesses the effects of multinational operations on the performance of oil firms this is achieved by comparing productive and scale efficiencies of state and private oil companies as well as state multinationals and private multinationals a dataset of 50 firms each year from 2001 to 2010 reveals that although multinational operation is important in reducing productive inefficiencies of state firms it does not mitigate scale inefficiencies of state owned firms state firms should therefore make multinational operations a key policy direction since this will provide a transformative agenda towards equally competing with their private counterparts however better efforts need to be paid in reducing scale inefficiencies that are pervasive among state owned oil firms providing better controls on firm size will provide better drive towards future efficient production levels

deregulation consolidation and efficiency evidence from the spanish insurance industry this paper provides new information on the effects of deregulation and consolidation in financial services markets by analyzing the spanish insurance industry the sample period 1989 98 spans the introduction of the european union s eu third generation insurance directives which deregulated the eu insurance market deregulation has led to dramatic changes in the spanish insurance market the number of firms declined by 35 average firm size increased by 275 and unit prices declined significantly in both life and non life insurance we analyze the causes and effects of consolidation using modern frontier efficiency analysis to estimate cost technical and allocative efficiency as well as using malmquist analysis to measure total factor productivity tfp change the results show that many small inefficient and financially underperforming firms were eliminated from the market due to insolvency or liquidation as a result the market experienced significant growth in tfp over the sample period consolidation not only reduced the number of firms operating with increasing returns to scale but also increased the number operating with decreasing returns to scale hence many large firms should focus on improving efficiency by adopting best practices rather than on further growth

a note on the malmquist productivity index in recent years the malmquist index has gained in popularity as a measure of productivity change we demonstrate that in the presence of non constant returns to scale the malmquist productivity index does not accurately measure productivity change the bias is systematic and depends on the magnitude of scale economies

bias in malmquist index and cost function productivity measurement in banking this paper illustrates how many prior studies ofproductivity growth in the banking industry have been overstated this occurs with both dea malmquist index and parametric stochastic cost frontier productivity measurement approaches the problem is not due to the technique used but in how it is applied it is easiest to see in the banking industry due the nature ofthe data available the bias is eliminated when all outputs and inputs are included in the analysis ensuring that the balance sheet restriction is met although simple in concept this problem and its solution have so far been neglected in the literature r 2002 elsevier science b v all rights reserved

foreign bank entry deregulation and bank efficiency lessons from the australian experience abstract this study considers the impact of foreign bank entry on banking efficiency in australia during the post deregulation period 1988 2001 using data envelopment analysis malmquist indices and stochastic frontier analysis we find foreign banks more efficient than domestic banks which however did not result in superior profits major australian banks have used size as a barrier to entry to new entrants furthermore bank efficiency has increased post deregulation and the competition resulting from diversity in bank types was important to prompt efficiency improvements finally the recession of the early 1990s resulted in a distinct shift in the process of efficiency changes

sensitivity analysis of efficiency and malmquist productivity indices an application to spanish savings banks abstract hypothesis testing and statistical precision in the context of non parametric efficiency and productivity measurement have been investigated since the early 1990s recent contributions focus on this matter through the use of resampling methods i e bootstrapping techniques however empirical evidence is still practically non existent this gap is more noticeable in the case of banking efficiency studies where the literature is immense in this work we explore productivity growth and productive efficiency for spanish savings banks over the initial post deregulation period 1992 1998 using data envelopment analysis dea and bootstrapping techniques results show that productivity growth has occurred mainly due to improvement in production possibilities and that mean efficiency has remained fairly constant over time the bootstrap analysis yields further evidence as for many firms productivity growth or decline is not statistically significant with regard to efficiency measurement the bootstrap reveals that the disparities in the original efficiency scores of some firms are lessened to a great extent

productivity change using growth accounting and frontier based approaches evidence from a monte carlo analysis this study presents some quantitative evidence from a number of simulation experiments on the accuracy of the productivitygrowth estimates derived from growthaccounting ga and frontier based methods namely data envelopment analysis corrected ordinary least squares and stochastic frontier analysis based malmquist indices under various conditions these include the presence of technical inefficiency measurement error misspecification of the production function for the ga and parametric approaches and increased input and price volatility from one period to the next the study finds that the frontier based methods usually outperform ga but the overall performance varies by experiment parametric approaches generally perform best when there is no functional form misspecification but their accuracy greatly diminishes otherwise the results also show that the deterministic approaches perform adequately even under conditions of modest measurement error and when measurement error becomes larger the accuracy of all approaches including stochastic approaches deteriorates rapidly to the point that their estimates could be considered unreliable for policy purposes

the wealth distribution with durable goods in the united states the distribution of houses is less egalitarian than that of earnings for the total population but these two distributions are remarkably similar for homeowners additionally housing as a fraction of total wealth decreases with the level of wealth in order to understand the different factors that account for these wealth composition patterns we introduce illiquid houses and collateral credit in a general equilibrium model of heterogeneous agents with idiosyncratic uncertainty a combination of very persistent shocks to earnings frictions in the housing market and a rental market is necessary to obtain numbers in line with the evidence

can double auctions control monopoly and monopsony power in emissions trading markets abstract we conduct a laboratory experiment to investigate whether the double auction institution can suppress market power in emissions trading markets we study 24 markets with varying market structure in a aba crossover design which controls for subject effects we find clear evidence of successful use of market power average prices rise under monopoly and fall under monopsony opening prices are affected much more than closing prices profits are redistributed in favor of the agent with power efficiency is not affected significantly analysis of convergence trends suggests that this is not a transitory phenomenon we interpret our results as evidence of successful price discrimination within a double auction market

consumer durables and inertial behaviour estimation and aggregation of s s rules for automobile purchases the s s model originally introduced in the study of inventories see arrow et al 1951 scarf 1959 has recently received renewed attention both in the durable consumption and in the investment and labour demand literatures caballero 1993 for instance appeals to these type of models to explain the time series properties of durable expenditure and in particular the persistence or slow adjustment of such a variable in this paper i model the purchase behaviour of automobiles by u s households as an s s rule i estimate a flexible specification of such a rule using a large microeconomic data set and study some of the aggregate implications of this type of inertial behaviour the paper is one of the first attempts at estimating directly the parameters of an s s rule using micro data because of this some of the methodological issues concerning the specification and the estimation of s s rules are relevant for many potential applications furthermore the paper is one of the first to discuss and quantify the aggregate implications of an s s rule estimated on micro data in the presence of non convex transaction costs a full and consistent characterization of individual behaviour is very hard and typically requires strong restrictions grossman and laroque 1991 prove that an s s rule is optimal for a consumption and investment problem under very special circumstances some of their results were extended by eberly 1991 and beaulieu 1993a b eberly 1991 in particular has derived some closed form solutions for durable consumption in the presence of transaction costs while caballero and engel 1994 construct a model of investment where an s s rule is optimal the main problem with these theoretical results is that it is only possible to show optimality of s s rules under very stringent conditions in particular a necessary condition to derive them is that the optimization problem faced by an individual consumer can be reduced to a problem with a single state variable unfortunately as pointed out by bar ilan and blinder 1992 even simple generalizations are extremely difficult to analyse

comparing malmquist and hicks moorsteen productivity indices exploring the impact of unbalanced vs balanced panel data abstract we explore the effect of balancing unbalanced panel data when estimating primal productivity indices using non parametric frontier estimators first we list a series of pseudo solutions aimed at making an unbalanced panel balanced then we discuss some intermediate solutions e g balancing 2 years by 2 years furthermore we link this problem with a variety of literatures on infeasibilities statistical inference of non parametric frontier estimators and the index theory literature focusing on the dynamics of entry and exit in industries we then empirically illustrate these issues comparing both malmquist and hicks moorsteen productivity indices on two data sets in particular we test for the differences in distribution when comparing balanced and unbalanced results for a given index and when comparing malmquist and hicks moorsteen productivity indices for a given type of data set the latter tests are crucial in answering the question to which extent the malmquist index can approximate the hicks moorsteen index that has a total factor productivity tfp interpretation finally we draw up a list of remaining issues that could benefit from further exploration

nonparametric estimates of the components of productivity and profitability change in u s agriculture recent theoretical advances in total factor productivity tfp measurement mean that tfp indexes can now be exhaustively decomposed into unambiguous measures of technical change and efficiency change to date all applications of this new methodology have involved decomposing indexes that have poor theoretical properties this article shows how the methodology can be used to decompose a new tfp index that satisfies all economically relevant axioms from index theory the application is to state level data from 1960 to 2004 in most states the main drivers of agricultural tfp change are found to have been technical change and scale and mix efficiency change

durables nondurables down payments and consumption excesses abstract we examine a model that generalizes the standard buffer stock model of saving to accommodate durables nondurables down payment requirements and adjustment costs in the durables market we find that nondurable consumption becomes more volatile relative to income as down payments decrease at the individual and at the aggregate level moreover for plausible parameter values the model can explain the excess smoothness and excess sensitivity observed in u s aggregate data the result follows from a gradual adjustment of consumption to permanent income shocks when agents attempt to spread out the burden of down payments over time compounded by slow adjustment due to transaction costs

expenditure on durable goods a case for slow adjustment for more than a half a decade the fact that expenditure on durables can be well approximated by a random walk has remained a hidden puzzle challenging almost any theory in which agents smooth the use of their wealth this paper shows that once a nonparsimonious approach is used or lower frequencies of the data are examined the fact itself disappears changes in expenditures on durables reveal a degree of reversion consistent with the permanent income hypothesis pih although this reversion occurs at a rate significantly slower than what is suggested by a frictionless pih model

market power and hot air in international emissions trading the impacts of us withdrawal from the kyoto protocol ten years after the initial climate change convention from rio in 1992 the industrialized world is finally likely to ratify the kyoto protocol which will impose legally binding greenhouse gas emission reductions on the developed world however the kyoto protocol will enter into force without the usa which withdrew under president bush in march 2001 accounting for hot air and market power of the former soviet union on emission permit markets it is shown that us withdrawal has important consequences on environmental effectiveness compliance costs and excess costs of market power under the kyoto protocol non compliance of the usa implies a dramatic decrease in environmental effectiveness as well as compliance costs of oecd countries whereas the former soviet union and transitional economies in eastern europe suffer from a huge decline in permit sales revenues excess costs of market power in permit trade increase in relative terms but decline substantially in absolute terms due to us withdrawal pol

aggregation of malmquist productivity indexes allowing for reallocation of resources in this paper we consider aggregate malmquist productivity index measures which allow inputs to be reallocated within the group when in output orientation this merges the single period aggregation results allowing input reallocation of nesterenko and zelenyuk 2007 with the aggregate malmquist productivity index results of zelenyuk 2006 to determine aggregate malmquist productivity indexes that are justified by economic theory consistent with previous aggregation results and which maintain analogous decompositions to the original measures such measures are of direct relevance to firms or countries who have merged making input reallocation possible allowing them to measure potential productivity gains and how these have been realised or not over time

malmquist productivity index estimation with zero value variables the case of greek prefectural training councils abstract the paper suggests a technique for the parametric estimation of the malmquist productivity growth index when the dataset to be analyzed contains a considerable number of observations with zero values a dummy variable technique suggested by battese j agric econom 48 1997 250 is extended to a translog specification of the input distance function moreover technical changes tcs are decomposed into neutral and biased components and the sources of total productivity growth are computed via formulae explicitly accounting for the discrete nature of the data our approach has been applied to the greek prefectural training councils a state extension system for the general public findings indicate a considerably negative productivity growth primarily attributable to regressive tc

malmquist indices of productivity growth during the deregulation of norwegian banking 1980 89 productivity growth during the deregulation of the norwegian banking industry is studied within the framework of data envelopment analysis which explicitly allows for multiple outputs introducing malmquist indices for productivity growth total growth can be decomposed into frontier growth and change in each bank s distance to the frontier both the total growth index and its components can be consistently chained over time we find productivity regress at the average bank prior to the deregulation but rapid growth when deregulation took place deregulation also led to less dispersion of productivity levels within the industry

consumption dynamics during recessions when will durable expenditures respond strongly to economic stimulus we build from micro evidence and show that in a heterogeneous agent business cycle model with xed costs of durable adjustment responsiveness is substantially dampened during recessions our model estimates imply that during the great recession durable expenditures were half as responsive to additional stimulus as during the boom in the 1990s this procyclical responsiveness is driven by changes in the distribution of households desired durable holdings over the cycle we directly test our model by estimating this distribution empirically using psid micro data and nd that the distribution in the data moves cyclically as predicted in addition to this micro evidence we also provide support for our model s procyclical responsiveness using aggregate time series data and we show this time series evidence is inconsistent with simpler models featuring smooth adjustment costs

emissions trading with shares and coupons when control over discharges is uncertain abstract two important decisions in designing markets for tradable emissions permits are whether to allow banking of permits coupons and whether to allow trading in entitlements to future permits shares banking is predicted to reduce price instability when firms trade in a reconciliation market after the quantity of emissions has been determined tradable shares are a common feature in proposals for emissions trading in canada we conduct a laboratory experiment to investigate how bankable coupons and tradable shares affect efficiency and prices under uncertainty cognitive demands on the subjects are reduced by computerized advice on the optimal allocation of coupons across periods and the implied marginal values of coupons and shares banking share trading and uncertainty conditions are introduced in a complete factorial design with three observations per cell high efficiencies are observed across all treatments uncertainty in the control of emissions leads to substantial price instability when banking is not allowed banking virtually eliminates the instability but reduces the efficiency of the market institution share trading reduces trading volumes increases price stability and improves efficiency

market power in emissions trading markets ruled by a multiple unit double auction further experimental evidence we discuss selected methodological problems of previous double auction da experiments and test the hypothesis that a multiple unit double auction muda is able to prevent market power in an emissions trading market additionally we analyze how the information subjects receive about the market structure and different levels of subjects experience influence the behavior based on a larger number of independent observations than analyzed in previous studies the experiment generates two main results first emissions trading markets ruled by a muda realize a high degree of efficiency even under market power conditions however a muda is in general not able to restrict market power we observe persistent price discrimination in two market power environments i e the distribution of profits is strongly shifted in favor of the strong market side without greatly harming efficiency this result is independent of the information to subjects about the market structure second when subjects are experienced the efficiency is higher and the ability of the strong market side to exercise market power declines strongly however the variability of behavior is large and the strong market side is still able to realize supracompetitive profits in some groups

a dynamic model of housing demand estimation and policy implications a dynamic model of housing demand using data from the panel study of income dynamics psid we specify estimate and simulate a dynamic structural model of housing demand our model generalizes previous applied econometric work by incorporating realistic features of the housing market including non convex adjustment costs from buying and selling a home credit constraints from minimum downpayment requirements and uncertainty about the evolution of incomes and home prices we argue that these features are critical for capturing salient features of housing demand observed in the psid after estimating the model we use it to simulate how consumer behavior responds to house price and income declines as well as tightening credit these experiments are motivated by the u s recession starting in december of 2007 that saw large falls in home prices large negative income shocks for many households and tightening credit standards in the short run relatively few households adjust their housing stock households respond instead by reducing non housing consumption and reducing wealth because they wish to avoid losing their home and the associated adjustment costs households that adjust in the short run are those hit with a series of bad shocks such as a negative income shock and a home price decline a larger proportion of households do adjust their consumption in the long run increasing their housing stock since housing is less expensive however such changes may occur several years after the shocks listed above

productivity and efficiency of vietnamese banking system new evidence using fare primont index analysis this article aims to provide a clearer view on the recent evolutions of the vietnamese banking system that can be useful to public authority when taking restructuring decisions this article focuses on the evolution of productivity of vietnamese banks over the period 2008 to 2012 and on the evolution of the different components of this productivity technical change pure technical efficiency and mix and scale efficiency the methodology draws from very recent developments in index theory in the design of multiplicative complete economically ideal indexes using fare primont productivity indexes to measure productivity this methodology is applied to a balanced panel of vietnamese banks the results complement observations usually made on the recent development of the vietnamese banking system they show that the state bank of vietnam s restructuring policy cannot focus only on either the insufficient size of banks or a better management of these banks in terms of the mix of outputs both must be conside

comparing fourier and translog specifications of multiproduct technology evidence from an incomplete panel of french farmers selecting a functional form for a cost or profit function in applied production analysis is a crucial step in assessing the characteristics of a technology the present study highlights differences in the description of a technology which are induced by fitting a fourier or a translog cost functions on average both forms provide similar information on the technology however estimation results and statistical tests tend to favour the fourier specification this is mainly because many trigonometric terms appear to be significant in our application accordingly our results show that the fourier cost function is able to represent a broader range of technological structures than the translog the paper presents an application to the case of an incomplete panel of french farmers in the process three technical issues are addressed the missing data problem the choice of the order of approximation and the conditions ensuring asymptotic normality of fourier parameters estimates

income and wealth heterogeneity in the macroeconomy how do movements in the distribution of income and wealth affect the macroeconomy we analyze this question using a calibrated version of the stochastic growth model with partially uninsurable idiosyncratic risk and movements in aggregate productivity our main finding is that in the stationary stochastic equilibrium the behavior of the macroeconomic aggregates can be almost perfectly described using only the mean of the wealth distribution this result is robust to substantial changes in both parameter values and model specification our benchmark model whose only difference from the representative agent framework is the existence of uninsurable idiosyncratic risk displays far less cross sectional dispersion and skewness in wealth than u s data however an extension that relies on a small amount of heterogeneity in thrift does succeed in replicating the key features of the wealth data furthermore this extension features aggregate time series that depart significantly from permanent income behavior

exclusionary manipulation of markets for pollution rights abstract strategic price manipulation can affect the distribution of transferable pollution rights across polluters and the efficiency of pollution control efforts prior research has concentrated on market manipulation by firms seeking only to minimize the sum of pollution rights costs and pollution abatement costs in this paper we explore the potential for the exclusionary manipulation of pollution permit markets intended to drive up the costs of one s rivals and we distinguish between the resource allocation effects of exclusionary manipulation and cost minimizing manipulation we find that exclusionary manipulation can sometimes worsen and sometimes ameliorate the abatement inefficiency which occurs under cost minimizing manipulation and that an overbuying rule can obviate or at least limit damages from this form of strategic behavior

on two definitions of productivity abstract caves et al in 1982 introduced a productivity measure that does not proceed from a continuous timer presentation they named these indexes after sten malmquist who in 1953 used ratios of distance functions to formulate quantity indexes in the consumer context in a later paper diewert proposed an alternative definition of productivity also based on distance functions which he attributed to hicks and moorsteen in this letter we provide necessary and sufficient conditions for the malmquist productivity index to equal the hicks moorsteen index

total factor productivity growth technological progress and technical efficiency change dimensions of productivity change in yugoslavia 1965 1978 this article total factor productivity growth technological progress and technical efficiency change dimensions of productivity change in yugoslavia 1965 78 was reprinted with permission from the december 1982 issue of the economic journal this article proposes a methodology that decomposes total factor productivity change into two distinct elements technological progress and changes in technical efficiency technological progress is defined as the change in the best practice production frontier all other productivity change is attributed to technical efficiency change the article provides a theoretical framework for decomposing total factor productivity growth as well as a specification and estimation of the deterministic frontier production function it employs a programming technique to estimate a flexible functional form of the production frontier the paper then applies this technique to empirical data from yugoslavia of the period from 1965 to 1978 it concludes that for yugoslavia improvements to technical efficiency comprise the dominant contribution to total factor productivity change this agrees with accumulating evidence that in many developing economies productivity gain due to technological mastery of imported technology is substantial

decomposing productivity indexes into explanatory factors abstract productivity measures are increasingly regarded as key indicators of economic performance identifying sources of productivity growth is of interest to both firms and policy makers this paper revisits the debate on how to decompose productivity growth into explanatory factors with a focus on extracting technical progress technical efficiency change and returns to scale components using bjurek s concept of the malmquist index introduced into production theory in a systematic way by caves christensen and diewert a reference technology is required to define the components of interest unlike other approaches ours do not make any convexity assumptions on the reference technology but instead follows the example of tulkens and his coauthors in assuming that the reference technology satisfies free disposability assumptions a new decomposition of a productivity index is provided with the existence and properties of the underlying distance functions of the decomposition proven under relatively unrestrictive assumptions the paper also provides for the first time a theoretical justification for the geometric average form of the bjurek productivity index these rigorous theoretical contributions provide significant avenues for enhanced understanding of empirical productivity performance

tradable quota taxation and market power abstract we investigate how corrective taxation can improve the efficiency properties of tradable quota systems affected by market power indeed we show that when there is a dominant firm in the tradable quota market the regulator can set an ad hoc taxation on firms traded quotas that restores cost effectiveness without driving the dominant firm s net demand to zero achieving cost effectiveness with market power and quota taxation implies some costs in terms of tax revenue that however can be justified by the corresponding reduction of compliance costs moreover we see that there may be cases where all firms result to be better off after the implementation of corrective taxation

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

productivity change and decomposition analysis of japanese regional economies this study examines the productivity growth and its four components for japanese regional economies by analyzing 47 prefectures for the period 1995 2012 the productivity changes are measured by th

is there a slowdown in agricultural productivity growth in south america this article estimates agricultural productivity growth in 10 south american countries in 1969 2009 with the objective of investigating if the slowdown being measured in other countries is present in the region results show that productivity growth accounts for half of the three fold increase in agricultural output during this period and that performance is sensitive to r d investments in the sector the slowdown found for the 1990s to 2000s in the u s and some european economies does not seem to be present yet in south america the region s total factor productivity tfp growth rate increased steadily from 1 07 during the 1970s to 2 29 during the 2000s given lags in adoption and the adaptive nature of innovations in these economies we have yet to see the potential effects in south american agriculture of decreases in r d in advanced economies

aggregate employment dynamics building from microeconomic evidence this paper studies quarterly employment flows of approximately 10 000 u s manufacturing establishments the authors use establishments hours week to construct measures of the deviation between desired and actual employment and use these as the establishments main state variables the main findings are 1 microeconomic adjustment functions are nonlinear with plants adjusting disproportionately to large shortages 2 adjustments are often either large or nil suggesting the presence of nonconvexities in the adjustment cost technologies 3 the bulk of average employment fluctuations is accounted for by aggregate rather than reallocation shocks and 4 microeconomic nonlinearities amplify the impact of large aggregate shocks copyright 1997 by american economic association

market power in tradable emission markets a laboratory testbed for emission trading in port phillip bay victoria abstract in theory competitive emission permit markets minimize total abatement costs permit markets are often imperfectly competitive however and may be thin and dominated by large firms the dominant firm s could exercise market power and increase other firms costs of pollution control while reducing their own emission control costs this paper reports a testbed laboratory experiment to examine whether a dominant firm can exercise market power in a permit market organized using the double auction trading institution our parameters approximate the abatement costs of sources in a proposed tradable emissions market for the reduction of nitrogen in the port phillip watershed in victoria australia we vary across treatments the initial allocation of permits to sources so that in one treatment the seller of permits is a monopolist and in another treatment the market is duopolistic we also vary the information that subjects have about the number and abatement costs of their competitors we find that prices and seller profits are higher and efficiency is lower on average in the monopoly sessions compared with the duopoly sessions but the differences are not substantial and are not statistically significant due to pronounced variation across sessions moreover prices profits and transaction volumes are usually much closer to the competitive equilibrium ce than the monopoly equilibrium

the malmquist total factor productivity index the definitions of the malmquist output and input quantity indexes specified by d w caves l r christensen and w e diewert 1982 are applied in this study based on these indexes a malmquist total factor productivity index is derived for general production structures the definition maintains the fundamental characteristic of a productivity index as a ratio between an output quantity change index and an input quantity change index this index provides a remedy for the shortcoming of the traditional definition of the malmquist productivity index in that the latter does not correctly measure changes in productivity in the presence of changes in returns to scale copyright 1996 by the editors of the scandinavian journal of economics

technological change and efficiency in the presence of quasi fixed inputs a dea application to the hospital sector abstract quasi fixed inputs are present in virtually all sectors of the economy and cannot be adjusted to their optimal value even in the long run this constraint must be incorporated in models to correctly measure efficiency and technological change assuming that all inputs can be freely and instantly set to their optimal level overestimates firms sectors countries capacity to adjust biases results and weakens dea method as a working tools for managers we propose a modified dea approach introducing quasi fixed inputs and apply the method to hospital emergency services in montreal to show that such limitations can be lifted

consumer durables evidence on the optimality of usually doing nothing the authors argue that lumpy nonconvex transaction costs are the norm for a wide range of economic decisions which are thus characterized by inertial behavior application of this idea to the consumption of durable goods yields an s s decision rule which when aggregated highlights the different expected behavior of average expenditure per purchase versus the number of purchases the empirical implications of this rule are presented and compared to other theories a battery of empirical tests generally supports the predictions of the model in particular it does a good job of explaining the time pattern of response of spending on durables to a change in income copyright 1992 by ohio state university press

measuring how fiscal shocks affect durable spending in recessions and expansions we estimate how durable expenditures respond to government spending shocks at different points in the business cycle using a nonlinear var approach that allows for the durable multiplier to vary smoothly with the state of the economy we find strong evidence that the aggregate durable spending response to fiscal shocks is substantially larger during expansions than during recessions in contrast to what has been has been observed for the aggregate multiplier we argue that these results are consistent with the theoretical predictions of the fixed cost model of durable demand in berger and vavra 2012

a simple testable model of double auction markets abstract we propose a model of price formation in double auction markets which employs the strong simplifying assumption that agents neglect strategic feedback effects and regard themselves as playing a game against nature agents otherwise are strict expected utility maximizers employing bayesian updating procedures we prove the optimality of simple aggressive reservation price strategies in our general model and propose a parametric form that yields very detailed and computable predictions of market behavior

the effects of fiscal stimulus evidence from the 2009 cash for clunkers program we evaluate the impact of the 2009 cash for clunkers program on short and medium run auto purchases our empirical strategy exploits variation across u s cities in ex ante exposure to the program as measured by the number of clunkers in the city as of summer 2008 we find that the program induced the purchase of an additional 370 000 cars in july and august 2009 however we find strong evidence of reversal high clunker counties bought fewer autos in the 10 months after the program expired which offset most of the initial purchases we find no evidence of an effect on employment house prices or household default rates in cities with higher exposure to the program jel codes h20 e62 copyright 2012 oxford university press

development and application of the hicks moorsteen productivity index for the total factor productivity assessment of wastewater treatment plants abstract the assessment of the productivity change in wastewater treatment plants is essential to improve performance and reduce operational costs several indices are available to compute unit productivity however some assessments are more reliable than others in the absence of price data the malmquist productivity index is the most commonly applied but it does not maintain total factor productivity properties under variable returns to scale technology hence malmquist productivity index is not a suitable index to compute total factor productivity change in wastewater treatment plants the present study served to overcome such limitations by calculating for the first time total factor productivity changes in a sample of 204 spanish wastewater treatment plants using the hicks moorsteen productivity index it is a multiplicatively complete index which can be decomposed as several sub indices representing technical and efficiency changes therefore this study also investigated the drivers of total factor productivity change in wastewater treatment plants results showed a 5 4 total factor productivity decline per year from 2003 to 2008 in the plants analysed the primary driver in the reduction was efficiency change alternatively technical change improved during the five years of study the results of this study provide support for policymakers and managers in decision making processes and contribute to the improvement of technical and economic wastewater treatment plants performance in addition it is evidenced that wastewater treatment plants current dependence on external energy sources should be reduced to improve productivity and reduce costs to citizens who pay for wastewater treatment services

auctioning vs grandfathering in cap and trade systems with market power and incomplete information we compare auctioning and grandfathering as allocation mechanisms of emission permits when there is a secondary market with market power and firms have private information on their own abatement technologies based on real life cases such as the eu ets we consider a multi unit multi bid uniform auction at the auction each firm anticipates its role in the secondary market either as a leader or a follower this role affects each firms valuation of the permits which are not common across firms as well as their bidding strategies and it precludes the auction from generating a cost effective allocation of permits as it occurs in simpler auction models auctioning tends to be more cost effective than grandfathering when the firms abatement cost functions are sufficiently different from one another especially if the follower has lower abatement costs than the leader and the dispersion of the marginal costs is large enough

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

adjustment of consumers durables stocks evidence from automobile purchases this paper tests an optimal s s rule in household durable purchases and examines directly the resulting aggregate expenditure dynamics the observed decision rule responds to income uncertainty and growth as predicted by an s s model resulting from transactions costs tests against liquidity constraints find that about half the households purchase according to an optimal s s rule aggregating the s s rule over households produces a cross section distribution of durables holdings the empirical distribution is similar to that predicted theoretically as is its response to aggregate shocks furthermore simulations of aggregate expenditure based on the household distribution exhibit dynamics consistent with those observed in the 1980s

feasible estimation of firm specific allocative inefficiency through bayesian numerical methods both the theoretical and empirical literature on the estimation of allocative and technical inefficiency has grown enormously to minimize aggregation bias ideally one should estimate firm and input specific parameters describing allocative inefficiency however identifying these parameters has often proven difficult for a panel of chilean hydroelectric power plants we obtain a full set of such parameters using gibbs sampling which draws sequentially from conditional generalized method of moments gmm estimates obtained via instrumental variables estimation we find an economically significant range of firm specific efficiency estimates with differing degrees of precision the standard gmm approach estimates virtually no allocative inefficiency for industry wide parameters copyright 2009 john wiley sons ltd

shocks stocks and socks smoothing consumption over a temporary income loss we investigate how households in temporarily straitened circumstances due to an unemploy ment spell cut back on expenditures and how they spend marginal dollars of unemployment insurance ui benefit our theoretical and empirical analyses emphasize the importance of allowing for the fact that households buy durable as well as non durable goods the theoretical analysis shows that in the short run households can cut back significantly on total expenditures without a significant fall in welfare if they concentrate their budget reductions on durables we then present an empirical analysis based on a canadian survey of workers who experienced a job separation exploiting changes in the unemployment insurance system over our sample period we show that cuts in ui benefits lead to reductions in total expenditure with a stronger impact on clothing than on food expenditures our empirical strategy allows that these expenditures may be non separable from employment status the effects we find are particularly strong for households with no liquid assets before the spell started these qualitative findings are in precise agreement with the theoretical predictions jel d11 d12 d91 j65 2009 by the european economic association

asset prices and asset quantities we propose an organizing framework that determines asset prices by equating household sector asset demand derived from an economic model to the observed supply of assets provided by other sectors we then use a specific model of household asset demand to decompose historical changes in asset positions into changes in new asset supply and household income as well as changes in return expectations our findings show that supply and income changes are important determinants of the wealth to gdp ratio and real estate positions and return expectations are the key determinant of equity positions jel g11 g12 e44 e21