estimating griliches k shifts griliches k shift a crucial parameter in the welfare evaluation of technological change is shown to be equal to the radial rate of technological change plus a vector of commodity bias parameters obtained from the distance function the analysis permits decomposition of sectoral productivity growth into productivity growth by commodity the k shifts estimated for wheat corn soybeans and beef in u s agriculture indicate a decrease in the marginal cost of production of corn soybeans and wheat during the 1950 1993 years

the non monetary nature of gifts this paper addresses the prevalence of non monetary gifts over more highly valued and e cient monetary transfers in social relationships we demonstrate that under a wide variety of circumstances ine cient non monetary gifts will be o ered by a donor in lieu of cash in order to signal the donor s quality of information about the recipient s preferences this result emerges because gift giving is ine cient relative to cash and not because of any arbitrary assumptions regarding communication in particular the donor has available the strategy of o ering cash and saying what he would have purchased nonetheless there is still an important equilibrium role for buying gifts 2001 elsevier science b v all rights reserved jel classixcation a13 d10 d64 d82 z1

technical and environmental efficiencies and best management practices in agriculture an input distance function idf is estimated to empirically evaluate and analyse the technical and environmental efficiencies of 210 farms located in the chaudiere watershed quebec where water quality problems are particularly acute because of the production of undesirable outputs that are jointly produced with agricultural products the true idf is approximated by a flexible translog functional form estimated using a full information maximum likelihood method technical and environmental efficiencies are disaggregated across farms and account for spatial variations our results show that there is a significant correlation between the two efficiencies the idf is used to compute the cumulative malmquist productivity index and the fisher index the two indices are used to measure changes in technology profitability efficiency and productivity in response to the adoption of two selected best management practices bmps whose objective is to reduce water pollution we found significant differences acro

budget constrained frontier measures of fiscal equality and efficiency in schooling equality and efficiency are key issues in educational reform here the authors analyze the efficiency and equality consequences of various school finance reforms using a cost indirect output distance function this function readily models multiple output production under conditions of budgetary constraint and provides a natural measure of performance that is closely related to farrell type measures of efficiency the analysis suggests that despite school district inefficiency finance reforms can affect student achievement however any potential gains in output from redistribution are dwarfed by the potential gains from increased efficiency more strikingly the analysis demonstrates that budgetary reforms designed to equalize expenditures could actually increase the inequality of student achievement

does consumer irrationality trump consumer sovereignty scholars working on the border of economics and psychology have documented many contexts in which individual decision making is unreliable and might be improved by paternalistic interventions against this mounting body of negative evidence economists default belief in consumer sovereignty has been motivated primarily by theory rather than evidence the goal of the present study is to see whether there is direct evidence supporting economists faith in consumer sovereignty in a simple context we address this question by presenting direct evidence that consumers own purchases generate between 10 and 18 more value per dollar spent than items received as gifts

productivity growth technical progress and efficiency in their comment subhash c ray and evangelia desli 1997 hereafter rd point out that the specification of the decomposition of the malmquist productivity index used by fare et al 1994 hereafter fgnz is not unique and propose and compute an alternative specification of that decomposition we will discuss additional decompositions at the end of this note but proceed here by comparing the rd decomposition with fgnz based on both conceptual and computational grounds rd provide a discussion of the overall malmquist productivity index including the important issue of when this index is equivalent to the traditional notion of total factor productivity tfp namely under the condition that the reference technology be consistent with constant returns to scale crs as they point out this will yield a measure of tfp even if the true underlying technology is not crs for example both rd and fgnz use the crs reference technology to compute overall malmquist productivity one of the key issues raised is the role of the underlying scale properties of the benchmark technologies used to define and compute both productivity and its components in particular two reference technologies are employed in both rd and fgnz what we refer to as crs and variable returns to scale vrs technologies by construction these technologies are nested the crs technology contains the vrs technology as in figure 1 in rd this nestedness provides the logical basis for our decomposition at a very intuitive level we would argue that these two benchmarks can be used to provide bounds on the underlying true but unknown technology 2 intuitively we see the vrs technology providing a type of convex inner approximation whereas the crs technology provides a type of convex outer approximation thus these two technologies provide alternative benchmarks they do not require that the data satisfy either crs or vrs another possible intuitive interpretation is that the crs captures a perhaps hypothetical long run and the vrs approximates the short run as a reference technology the crs technology has some very useful features for example it captures the notion of maximal

technical efficiency and impacts of deregulation an analysis of three functions in u s electric power utilities during the period from 1992 through 2000 the main purpose of this study is to examine the impacts of deregulation on technical efficiency and its changes over time for large scale u s electric power utilities during the period from 1992 through 2000 we analyze the efficiency of three individual functions i e generation transmission distribution and general administration and the deregulatory impacts on each of them in order to implement the analysis we estimate an input distance function by using a stochastic frontier analysis the results indicate that there is a significant impact of deregulation on efficiency in the generation and general administration functions while no effects are observed in the transmission distribution function

parametric efficiency tests economies of scale and input demand in u s electric power generation duality theory has been applied increasingly in recent years to study the structure of production a major advantage of using duality theory is that systems of input demand equations can be derived by simple differentiation facilitating the use of flexible functional forms also use of duality theory makes it possible to choose a representation of the technology which has desirable properties for estimation such as exogeneity of the regressors however the use of a dual representation of production structure is appropriate only if the corresponding maintained hypothesis concerning economic behavior e g cost minimization or profit maximization is valid the perceived advantages of the dual approach to studying production structure have led to some applications in which the maintained hypothesis concerning economic behavior is unlikely to be appropriate for example neoclassical cost functions have been used to study the characteristics of production in regulated industries despite an extensive theoretical literature indicating that a profit maximizing regulated firm would not minimize costs subject to market prices 2 in this paper we propose a generalized cost function that retains the principal advantages of the neoclassical cost function but does not require that cost minimization subject to market prices be imposed as a maintained hypothesis in our model firms are assumed to base their production decisions on unobservable shadow prices which reflect the effects of regulation on the effective prices of inputs parametric tests for cost minimization are obtained by expressing shadow prices as functions of market prices the generalized cost function is estimated with data for regulated electric utilities the parametric restrictions corresponding to cost minimizing behavior subject to market prices are rejected implying that the use of a neoclassical cost function is not appropriate in this application 3

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

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

gains from digitization evidence from gift giving in music abstract in this paper we focus on recorded music gifts during the holiday season and estimate the reduction in deadweight loss due to the transition from physical cd gift giving to digital music gift giving with gift cards based on our survey data we find that music cd gifts generate an average deadweight loss between 15 and 38 of the price according to our estimates of gift music album sales which are based on u s data the welfare gains from digitization in terms of eliminated deadweight loss as a percentage of total spending on music albums were between 5 and 13 during the week when digital sales peak in 2014

efficiency and performance in gas distribution evidence from brazil this article analyses the current state of the gas distribution industry in brazil by identifying the main factors that determine its efficiency in order to test the performance of the industry we have calculated the firms technical efficiency during the period 2001 2009 we analyse whether some economic and technological factors as consumer density load factor or regulation among others have affected the performance of this industry we show that companies serving markets with different customer characteristics diversification have reached higher levels of efficiency and evolved faster moreover the private ownership and price cap regulation are more efficient in relation to public ownership and cost of service regulation these findings are important to support the improvement of the regulation of gas distribution in the brazilian states

estimating input mix efficiency in a parametric framework application to state level agricultural data for the united states this paper contributes to the productivity literature by demonstrating novel econometric methods to estimate input mix efficiency ime in a parametric framework input mix efficiency is defined as

the deadweight loss of christmas comment two previous surveys used to measure the welfare implications of christmas gift giving in the united states have reached opposite conclusions joel waldfogel 1993 finds a welfare reduction of 13 percent or more associated with christmas giving curiously sara j solnick and david hemenway s 1996 henceforth sh replication of waldfogel s survey turns up just the opposite result a 214 percent welfare gain we design a series of controlled laboratory experiments to determine why the two papers arrive at opposite conclusions we do not produce our own estimate of the deadweight loss of gift giving rather our aim is to understand how and which among the differences in methodology between the two studies account for their divergent findings waldfogel 1993 surveyed 58 students enrolled in an intermediate microeconomics class about specific gifts they had received for christmas he asked recipients to estimate the amount paid by the giver for each gift received recipients were then asked to place a value on each gift they received respondents were instructed to estimate the value of a gift as the amount of cash such that you are indifferent between the gift and the cash not counting the sentimental value of the gift p 1331 waldfogel measures the welfare yield of a gift as the difference between the recipient s valuation and her cost estimate of the gift based on 278 gifts reported waldfogel finds that gifts have an average yield of 87 1 percent indicating that gifts lose about 13 percent of their value in the exchange from giver to receiver when cash gifts are excluded the average yield falls further to 83 9 percent sh were intrigued enough by waldfogel s results to replicate his study contrary to waldfogel sh find that gift giving is actually welfare improving with an average yield of 214 percent median yield 111 percent they claim that a broader subject pool than that questioned by waldfogel explains the reversal concerned that undergraduates in an intermediate microeconomics class may be unrepresentative sh administered their survey to members of the general public at train stations and airports and to staff and graduate students enrolled in a biostatistics or an economics class at the harvard school of public health they also altered the question used to elicit respondents valuations of gifts received their survey question reads as follows p 1300 aside from any sentimental value if without the giver ever knowing you could receive an amount of money instead of the gift what is the minimum amount of money that would make you equally happy the change in wording from the amount of cash such that you are indifferent to the amount of money that would make you equally happy was prompted by a concern that indifference is a technical word familiar only to economists it remains to be seen whether sh s equally happy question is substantially equivalent to the indifference version of the question or whether they have introduced a greater change than they realize an additional methodological concern is that the cost estimates always precede respondents valuations in both studies order effects are well documented in the social psychology literature cost estimates may influence valuations in particular costs may serve as a judgmental anchor upon which to base value estimates reversing the order of the questions is a technique common to survey and experimental methods in the social sciences to balance the researcher s design and offset possible order effects ruffle department of economics ben gurion university p o b 653 beer sheva 84105 israel e mail bradley bgumail bgu ac il tykocinski department of behavioral sciences ben gurion university beer sheva 84105 israel e mail oritt bgumail bgu ac il we thank tomer bakalash for research assistance and sara solnick todd kaplan three anonymous referees of this journal and seminar participants at ben gurion university universite louis pasteur and the 1998 esa meetings in mannheim for comments 1 howard schuman and stanley presser 1981 provide a good starting point in this literature

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

in search of welfare improving gifts gift giving is thought to decrease welfare recipients are sometimes stuck with gifts they would not have purchased because the giver does not perfectly know the recipient s preferences and in kind gifts cannot be costlessly refunded such gifts are welfare reducing compared to giving cash if in addition recipients possess full information as to which stores carry their desired goods and the ability to reach these stores costlessly we replace these two latter assumptions with the more realistic assumptions of uncertainty about the location of goods and search costs in contrast to existing economic models gifts in our model enhance expected welfare moreover gift giving cannot be replaced by a profit maximizing trader nor the introduction of nearby specialty stores carrying gift goods we use our model to explain a number of stylized facts about gift giving the organization of retail trade and in kind government transfers 2008 elsevier b v all rights reserved

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

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

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

synergy and learning effects of informal labor sharing arrangements summary we study the effects of informal labor sharing arrangements and other social interactions on farmers productivity in a developing country context testing whether these types of social and work interactions lead to productivity gains through learning synergy or both using a rich panel data set of ethiopian subsistence farmers we estimate a distance function of grains production and find large productivity gains approximately 33 and 29 in 1999 and 2004 from labor sharing due to synergy effects that boost labor productivity however labor sharing does not lead to learning as the productivity gains observed in years with labor sharing disappear in following years if the farmers do not continue to engage in labor sharing labor sharing partners are either neighbors relatives members of the same funeral and religious associations or have plots next to each other which together reduce labor sharing as a single venue for learning however the synergy effect is strong enough to warrant the design of extension and outreach policies that recognize and utilize farmers informal social networks such as labor sharing arrangements

the deadweight loss of christmas when economists comment on holiday gift giving it is usually to condone the healthy effect of spending on the macroeconomy however an important feature of gift giving is that consumption choices are made by someone other than the final consumer a potentially important microeconomic aspect of gift giving is that gifts may be mismatched with the recipients preferences in the standard microeconomic framework of consumer choice the best a gift giver can do with say 10 is to duplicate the choice that the recipient would have made while it is possible for a giver to choose a gift which the recipient ultimately values above its price for example if the recipient is not perfectly informed it is more likely that the gift will leave the recipient worse off than if she had made her own consumption choice with an equal amount of cash in short gift giving is a potential source of deadweight loss this paper gives estimates of the deadweight loss of holiday gift giving based on surveys given to yale undergraduates i find that holiday gift giving destroys between 10 percent and a third of the value of gifts while these recipients may be unrepresentative of the u s population their gifts are not necessarily unrepresentative holiday expenditures average 40 billion per year implying that a conservative estimate of the deadweight loss of christmas is a tenth as large as estimates of the deadweight loss of income taxation i also explore how deadweight loss and the tendency to give cash gifts vary with the relationship and age difference between giver and recipient i find that gifts from friends and significant others are most efficient while noncash gifts from members of the extended family are least efficient and destroy a third of their value i develop a simple expected utility model to explain the decision to give cash as opposed to in kind gifts the data are consistent with the model cash gifts are most common from the sorts of givers whose noncash gifts have the lowest expected value to recipients given their cost and high variability in recipient valuation

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

sex and credit do gender interactions matter for credit market outcomes abstract this paper studies the effects of gender interactions on the supply of and demand for credit using data from a large albanian lender we document that first time borrowers assigned to officers of the opposite sex are less likely to return for a second loan the effect is larger when officers have little prior exposure to borrowers of the other gender and when they have more discretion to act on their gender beliefs as proxied by financial market competition and branch size we also find that first time borrowers matched with opposite sex officers pay higher interest rates and receive smaller and shorter maturity loans but do not experience higher arrears our results are consistent with the existence of a gender bias and learning effects that lead to the disappearance of the bias

efficiency technical change and returns to scale in large us banks panel data evidence from an output distance function satisfying theoretical regularity abstract this paper provides parametric estimates of technical change efficiency change economies of scale and total factor productivity growth for large banks those with assets in excess of 1 billion in the united states over the period from 2000 to 2005 this is done by estimating an output distance function subject to theoretical regularity within a bayesian framework we find that failure to incorporate theoretical regularity conditions results in mismeasured shadow revenue and or cost shares which in turn leads to perverse conclusions regarding productivity growth our results from the regularity constrained model show that total factor productivity of the large us banks grew at an average rate of 1 98 over the sample period however our estimates also show a clear downward trend in the growth rate of total factor productivity and our decomposition of the primal divisia total factor productivity growth index into its three components technical change efficiency change and economies of scale indicates that technical change is the driving force behind this decline

regulation capital vintage and technical change in the electric utility industry this paper presents estimates of the rate of technical change in the electric power industry over the period 1951 78 the estimated model directly incorporates the effects of rate of return regulation and uses both a time trend and a vintage index to represent disembodied and embodied technical change respectively the results indicate that disembodied technical change was the primary source of cost reduction during 1951 70 and that tighter regulation as represented by a one point reduction in the rate of return would have reduced the rate of technical change by an average of 1 2 during 1951 78 34 references 18 footnotes 3 tables

pre recession efficiencies and input allocation decisions of agricultural and critically insolvent banks abstractthe late 2000s economic recession is considered the longest economic downturn since the 1930s great depression declining real estate values ignited an increase in loan defaults and mortgage foreclosures that led to a surge of bank failures at a rate not experienced by the u s banking industry since the 1980s a total of 509 bank failures were recorded by the fdic from january 2007 december 2014 with nearly 60 of these failures occurring in 2009 and 2010 in contrast there were only 24 bank failures in the u s during the 7 year period prior to 2007 this study analyzed certain components of operating decisions made by banks that either survived or became critically insolvent during the late 2000s financial crisis using an input distance stochastic frontier function to estimate the technical efficiency te and allocative efficiency ae between agricultural banks and non agricultural banks this efficiency analysis was applied to a 7 year pre recession period and is designed to final out any