a unifying framework for farrell profit efficiency measurement measuring profit efficiency is a challenging task and many different approaches have been suggested this paper synthesizes existing approaches and develops a general farrell type approach of the profit efficiency measurement our derivations unveil new and useful relationships between existing measures and the proposed new farrell type measures in addition this helps us establish a generalized and unifying framework for studying efficiency behavior of firms where the profit efficiency measure satisfies desirable properties and contains the conventional farrell measures of technical efficiency and allocative efficiency as multiplicative components a new component of the decomposition of profit efficiency which we call the revenue efficient allocative efficiency measure is introduced to identify the necessary changes of input scale and input mix in addition to output changes the proposed new approach also encompasses and is coherent with profit maximizing behavior as a benchmark case

forward looking assessment of the ghg abatement cost application to china abstract evaluation of abatement costs is critical in setting reduction goals and devising climate policy however reliable forward looking assessment of the short term effects of climate policy remains a major challenge using panel data of 30 chinese provinces during 1997 2015 we first estimate the marginal co2 abatement costs using a novel data driven approach convex quantile regression based on the marginal abatement cost estimates and china s plans regarding carbon intensity reduction and economic growth we present a forward looking assessment of the abatement costs for chinese provinces for 2016 2020 our main finding is that all the chinese provinces have a negative abatement cost which means these provinces can benefit from an increase in the absolute level of co2 emissions despite the constraint on carbon intensity the magnitudes of economic benefits exhibit a significant regional disparity because some provinces can increase more co2 emissions than others however there is still costly carbon intensity abatement relative to a counterfactual where the provinces meet their economic growth targets but in the absence of the intensity reduction constraints policy implications have been proposed to enhance the efficiency and fairness of climate policy in china

allocative efficiency of technically inefficient production units we discuss how to measure allocative efficiency without presuming technical efficiency this is relevant when it is easier to introduce reallocations than improvements of technical efficiency we compare the approach to the traditional one of assuming technical efficiency before measuring allocative efficiency in particular we develop necessary and sufficient conditions in the technology to ensure consistent measures we suggest alternative interpretations of the approaches and we relate them to motivational and organizational change perspectives

two dimensional efficiency decomposition to measure the demand effect in productivity analysis this paper proposes a two dimensional efficiency decomposition 2ded of profitability for a production system to account for the demand effect observed in productivity analysis the first dimension identifies four components of efficiency capacity design demand generation operations and demand consumption using network data envelopment analysis network dea the second dimension decomposes the efficiency measures and integrates them into a profitability efficiency framework thus each component s profitability change can be analyzed based on technical efficiency change scale efficiency change and allocative efficiency change an empirical study based on data from 2006 to 2008 for the us airline industry finds that the regress of productivity is mainly caused by a demand fluctuation in 2007 2008 rather than technical regression in production capabilities

weak disposability in nonparametric production analysis reply to fare and grosskopf fare and grosskopf this issue claim that a single abatement factor suffices for modeling weak disposability in nonparametric production models and that the kuosmanen 2005 technology that uses multiple abatement factors is larger than necessary this article demonstrates by a numerical example that a single abatement factor does not suffice to capture all feasible production plans and that its use leads to the violation of convexity one of the maintained assumptions of the model we also prove that the kuosmanen technology is the correct minimum extrapolation technology under the stated axioms

sectoral shocks and aggregate fluctuations abstract this paper presents a multisector dynamic general equilibrium model of business cycles with a distinctive feature aggregate fluctuations are driven by independent sectoral shocks the model hypothesizes that trade among sectors provides a strong synchronization mechanism for these shocks due to the limited but locally intense interaction that is characteristic of such input trade flows limited interaction characterized by a sparse intermediate input use matrix reduces substitution possibilities among intermediate inputs which strengthens comovement in sectoral value added and leads to a postponement of the law of large numbers in the variance of aggregate value added the chief virtue of this model is that reliance on implausible aggregate shocks is not necessary to capture the qualitative features of macroeconomic fluctuations building on horvath 1998 review of economic dynamics 1 781 808 which establishes the theoretical foundation for the relevance of limited interaction in the context of a stylized multisector model this paper specifies a more general multisector model calibrated to the us 2 digit standard industrial code economy simulations prove the model is able to match empirical reality as closely as standard one sector business cycle models without relying on aggregate shocks

the drivers of structural change the main goal of this paper is to provide an integrated survey of the literature devoted to identifying the drivers of structural change broadly defined as the process of reallocation of economic activity across the three broad sectors agriculture manufacturing and services using the ggdc 10 sector database this paper first presents the empirical facts associated with structural change in different regions of the world that is europe and the usa asia latin america and africa then reviews four determinants of structural change i changes in income ii changes in relative sectoral prices iii changes in input output linkages and iv changes in comparative advantage s via globalization and trade

taking versus taxing an analysis of conscription in a private information economy most countries currently man their militaries through conscription i e a draft conventional wisdom suggests that by lowering the budgetary cost of the military a draft reduces distortionary taxation especially when military needs are large we find that this intuition is misguided when income taxes are set optimally voluntary enlistments lead to less distortionary taxation than a draft because the tax base left behind by a volunteer army tends to be more productive than that after a draft for reasonable parameter values drafts are more distortionary and less socially desirable when military needs are large

directional shadow price estimation of co2 so2 and nox in the united states coal power industry 1990 2010 abstract shadow prices also termed marginal abatement costs provide valuable guidelines to support environmental regulatory policies for co 2 so 2 and no x the key contributors to climate change this paper complements the existing models and describes a directional marginal productivity dmp approach to estimate directional shadow prices dsps which present substitutability among three emissions and are jointly estimated we apply the method to a case study of co 2 so 2 and no x produced by coal power plants operating between 1990 and 2010 in the united states we find that dsp shows 1 1 times the maximal shadow prices estimated in the current literature we conclude that estimating the shadow prices of each by product separately may lead to an overestimation of the marginal productivity and an underestimation of the shadow prices

mixed strategy nash equilibrium in data envelopment analysis abstract in a typical productivity analysis the efficiency measure assumes a perfectly competitive market with an endogenous price and depends on a fixed orientation with respect to a specific firm such as an input oriented measure when an imperfectly competitive market affects the endogenous price however firms may take a mixed strategy approach to address uncertain competition this study proposes a mixed strategy measure msm we construct a model embedded with a data envelopment analysis dea framework that identifies the mixed strategy nash equilibrium in the first stage and considers a probabilistic and multi oriented efficiency measure in the second stage based on the environmental regulation and a typical nash measure we create two indices environmental consistency and strategic consistency to support the business roadmap development we validate the proposed msm with an empirical study of china s electric power industry the results find that the proposed msm complements the nash measure and the msm model successfully supports our two managerial strategies invest in capacity expansion or develop emission abatement technology

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

long term consequences of vietnam era conscription new estimates using social security data we use the draft lottery to construct instrumental variables iv estimates of the impact of vietnam era military service on veterans social security ssa earnings through 2007 we also use ssa data to construct iv estimates for employment as measured by an indicator for positive earnings and disability status as measured by an indicator for social security disability program application new findings for recent years show surprisingly rapid convergence in veteran and nonveteran earnings by the early 1990s there was no longer a substantial vietnam era conscription penalty the iv estimates also show no effect on employment or disability rates

explaining the worldwide decline in the length of mandatory military service 1970 2010 compulsory military service has declined considerably since 1970 this explained by changes on both the extensive and intensive margins by governments while the decision to use conscription for military purposes has been studied extensively in this paper we examine empirically the factors underlying the decline in the duration of military service obligations employing data from the economic freedom of the world index observed at 5 year intervals from 1970 to 2010 we find that the probability of a shorter military service time is positively associated with smaller country populations smaller lagged army sizes increases in primary schooling among young males and having common law legal origins our empirical approach also highlights how the elderly population exhibits a nonlinear relationship with the length of conscriptees time in uniform

carbon emission performance evaluation and allocation in chinese cities abstract this paper presents a dea approach with multiple abatement factors to evaluate co2 emission performance and allocate co2 emission quotas in chinese cities we first consider the difference of marginal abatement costs among cities and construct the non radial directional distance function with multiple abatement factors the total factor co2 emission performance index and its dynamic change index are then proposed to measure co2 emission performance considering equity and efficiency we develop a composite index by the hybrid method to allocate emissions quota which considers co2 emissions as well as co2 emission performance then we conduct an empirical study using inputs and outputs dataset of 71 chinese cities in 2005 2012 chinese cities have poor energy efficiency and still have high co2 emissions the eastern region outperforms the central region and the western region performs worst whereas the dynamic co2 emission performance of the central region has the largest increase the change of co2 emission performance is driven mainly by technological advances as for the co2 emission allocation the composite index method encourages cities to reduce emissions and enhance emission performance through carbon trading market it also motivates cities with high historical emissions to reduce their emissions by improving technology when they have poor co2 emission performance

nash profit efficiency a measure of changes in market structures abstract imperfectly competitive markets can be characterized by endogenous prices limited or no competition and the exercise of market power to address the resulting dysfunctionality this study proposes an alternative efficiency measure estimated by the directional distance function ddf with the direction toward nash equilibrium and develops the nash profit efficiency npe and its decomposition which complements the typical profit efficiency measure we model the production possibility set and the price functions of inputs and outputs and then develop the mixed complementarity problem micp we validate the model with an empirical study of the oil and natural gas industry in new york state between 1981 and 1989 the results show that before 1984 firms exploited a less competitive market that between 1984 and 1986 the number of new entrants transformed the market and that after 1986 no firms could exercise market power due to market restructuring deregulation and an unforeseen oil glut based on the results we conclude that the direction toward nash equilibrium can be justified for efficiency estimation in imperfectly competitive markets and that npe is appropriate for investigating changes in market structures

meta data envelopment analysis finding a direction towards marginal profit maximization abstract this paper discusses a new meta dea approach to solve the problem of choosing direction vectors when estimating the directional distance function the proposed model emphasizes finding the direction for productivity improvement rather than estimating the score of efficiency focusing on planning over evaluation in fact the direction towards marginal profit maximization implies a step by step improvement and wait and see decision process which is more consistent with the practical decision making process an empirical study of u s coal fired power plants operating in 2011 validates the proposed model the results show that the efficiency measure using the proposed direction is consistent with all other indices with the exception of the direction towards the profit maximized benchmark we conclude that the marginal profit maximization is a useful guide for determining direction in the directional distance function

a comment on weak disposability in nonparametric production analysis in his 2005 paper in this journal kuosmanen argues that shephard s specification of weak disposability in activity analysis dea models is not correct we show that shephard s specification does satisfy weak disposability and is the smallest technology to do so

lifetime earnings and the vietnam era draft lottery evidence from social security administrative records errata the randomly assigned risk of induction generated by the draft lottery is used to construct estimates of the effect of veteran status on civilian earnings these estimates are not biased by the fact that certain types of men are more likely than others to service in the military social security administrative records indicate that in the early 1980s long after their service in vietnam had ended the earnings of white veterans were approximately 15 percent less than the earnings of comparable nonveterans copyright 1990 by american economic association

the great diversification and its undoing we investigate the hypothesis that macroeconomic fluctuations are primitively the results of many microeconomic shocks we define fundamental volatility as the volatility that would arise from an economy made entirely of idiosyncratic sectoral or firm level shocks fundamental volatility accounts for the swings in macroeconomic volatility in the major world economies in the past half century it accounts for the great moderation and its undoing the initial great moderation is due to a decreasing share of manufacturing between 1975 and 1985 the recent rise of macroeconomic volatility is chiefly due to the growth of the financial sector jel e23 e32 e44 this article explores the hypothesis that changes in the microeconomic composition of the economy during the postwar period can account for the great moderation and its unraveling both in the united states and in the other major world economies we call fundamental volatility the volatility that would be derived only from microeconomic shocks if aggregate shocks come in large part from microeconomic shocks augmented by amplification mechanisms then aggregate volatility should track fundamental volatility to operationalize this idea the key quantity we consider which constitutes one departure from other studies is the following definition of fundamental volatility

how to properly decompose economic efficiency using technical and allocative criteria with non homothetic dea technologies abstract we discuss how to properly decompose economic efficiency when the underlying technology is non homothetic using alternative allocative and technical efficiency criteria we first show that only under the production of one output and assuming the particular case of constant returns to scale homotheticity we may claim that the standard radial models correctly measure pure technical efficiency otherwise when non homotheticity is assumed we then show that these traditional estimations would measure an undetermined mix of technical and allocative efficiency to restore a consistent measure of technical efficiency in the non homothetic case we introduce a new methodology that takes as reference for the economic efficiency decomposition the preservation of the allocative efficiency of firms producing in the interior of the technology this builds upon the so called reversed approach recently introduced by bogetoft et al 2006 that allows estimating allocative efficiency without presuming that technical efficiency has been already accomplished we illustrate our methodology within the data envelopment analysis framework adopting the most simple non homothetic bcc model and a numerical application in this application we show that there are significant differences in the allocative and technical efficiency scores depending on the approach

strategic corporate social responsibility and economic performance this article proposes a novel corporate social responsibility csr index based on a data envelopment analysis dea model acknowledging the argument that companies might favour those csr dimensions that provide strategic competitive advantages we argue that the index can capture companies strategic approach to csr furthermore our findings reveal a neutral relationship between this strategic csr index and economic performance as measured by return on assets roa and tobin s q when controlling for firm unobserved heterogeneity and past economic performance by contrast an equally weighted index of the same csr indicators is found to be negatively related with roa which reinforces our claim that this specific dea based index is a measure of strategic csr

distinguishing operational performance in power production a new measure of effectiveness by dea measuring the efficiency of power plant systems requires capturing fluctuations in the level of sales to customers as well as accounting for the effects of regulatory caps on emissions this study proposes a novel effectiveness measure considering desirable outputs and undesirable outputs via data envelopment analysis dea the new measure complements typical efficiency measures we test the validity of the proposed measure with an empirical case study of the fifty u s states and the district of columbia we find that the current interregional electricity transmission plan increases 8 56 in effectiveness for the emissions control we suggest a 9 8 reduction in electricity generation towards an effective production frontier we conclude that the proposed effectiveness measure s ability to distinguish sales and regulation effects from typical productive efficiency eliminates the bias often found in currently used measures

estimating most productive scale size using data envelopment analysis abstract the relation between the most productive scale size mpss for paparticular input and output mixes and returns to scale for multiple inputs multiple outputs situations is explicitly developed this relation is then employed to extend the applications of data envelopment analysis dea introduced by charnes cooper and rhodes ccr to the estimation of most productive scale sizes for convex production possibility sets it is then shown that in addition to productive inefficiencies at the actual scale size the ccr efficiency measure also reflects any inefficiencies due to divergence from the most productive scale size two illustrations of the practical applications of these results to the estimation of most productive scale sizes and returns to scale for hospitals and stem electric generation plants are also provided emphasize the advantage of this method in examining specific segments of the efficient production surface

multilateral productivity comparisons when some outputs are undesirable a nonparametric approach multilateral productivity comparisons of firms producing multiple outputs some of which are undesirable are obtained by making two modifications to the standard farrell approach to efficiency measurement the restriction that production technology satisfy strong disposability of outputs is relaxed to allow for the fact that undesirable outputs may be freely disposable and the efficiency measures are modified to allow for an asymmetric treatment of desirable and undesirable outputs performance measures that satisfy these requirements are calculated as solutions to programming problems the methodology is applied to a sample of mills producing paper and pollutants

cost efficiency of french rugby clubs this article analyses the cost efficiency of french first league rugby clubs using a stochastic frontier model the frontier estimation confirmed that the model fits the data well with all coefficients correctly signed and in line with the theoretical requirements the results show that one of the clubs is operating efficiently with the majority of clubs clustered around 20 inefficiency policy implications are derived

preference shifts and the change of consumption composition while most of the literature explaining the change in consumption composition has focused on the role of relative prices and non homothetic preferences this paper examines the importance of preference shifts i introduce dynamics in preferences and find that they play a relevant role and that their exclusion worsens model performance at least as much as the exclusion of allowing non homothetic preferences

regulatory reforms and productivity an empirical analysis of the japanese electricity industry the japanese electricity industry has experienced regulatory reforms since the mid 1990s this article measures productivity in japan s steam power generation sector and examines the effect of reforms on the productivity of this industry over the period 1978 2003 we estimate the luenberger productivity indicator which is a generalization of the commonly used malmquist productivity index using a data envelopment analysis approach factors associated with productivity change are investigated through dynamic generalized method of moments gmm estimation of panel data our empirical analysis shows that the regulatory reforms have contributed to productivity growth in the steam power generation sector in japan

emissions trading electricity restructuring and investment in pollution abatement this paper analyzes an emissions trading program that was introduced to reduce smog causing pollution from large stationary sources using variation in state level electricity industry restructuring activity i identify the effect of economic regulation on pollution permit market outcomes there are two main findings first deregulated plants in restructured electricity markets were less likely to adopt more capital intensive environmental compliance options as compared to regulated or publicly owned plants second as a consequence of heterogeneity in electricity market regulations a larger share of the permitted pollution is being emitted in states where air quality problems tend to be more severe jel l51 l94 l98 q53 q58 when the us federal government first began regulating major sources of air pollution in the 1960s the conventional approach to meeting air quality standards involved establishing maxi mum emissions rates or technology based standards for regulated stationary sources however economists have long maintained that an emissions permit market could more efficiently coor dinate pollution abatement activities provided a series of assumptions are met over the past few decades market based cap and trade cat approaches to regulating emissions from industrial point sources have become a centerpiece of environmental regulation in the united states in the theoretical first best permit market equilibrium the total social cost of meeting an emis sions cap is minimized each firm chooses a level of pollution abatement such that its marginal cost of reducing pollution is set equal to the social marginal benefit from emissions reduction in practice preexisting distortions in product markets that are subject to cat regulation may interfere with the emissions permit market s ability to operate efficiently this paper studies the effects of electricity market regulation on permit market outcomes in the context of a major us emissions trading program the nox budget program the recent wave of electricity industry restructuring in the united states has resulted in significant interstate variation in economic regulation consequently facilities in the same cat program face very different economic regu lation and investment incentives in their respective electricity markets whereas rate base regu lated plants are guaranteed to earn a rate of return on prudent investments in pollution abatement equipment deregulated plants operating in restructured electricity markets are offered no such

did vietnam veterans get sicker in the 1990s the complicated effects of military service on self reported health abstract the veterans disability compensation vdc program which provides a monthly stipend to disabled veterans is the third largest american disability insurance program since the late 1990s vdc growth has been driven primarily by an increase in claims from vietnam veterans raising concerns about costs as well as health we use the draft lottery to study the long term effects of vietnam era military service on health and work in the 2000 census we find no evidence that military service affected overall employment rates or overall work limiting disability rates that is health conditions that make work difficult at the same time military service sharply increased federal transfer income especially for lower skilled white men among whom there was also a large negative impact on employment and a marked increase in disability rates the differential impact of vietnam era service on low skilled men cannot be explained by more combat or war theatre exposure for the least educated because high school graduates were at least as likely to be exposed to combat or war theatre as the less educated this leaves the relative attractiveness of vdc for less skilled men and the work disincentives embedded in the vdc system as a likely explanation for our findings

hypercongestion in production correspondences an empirical exploration this empirical contribution reviews the rather limited existing literature measuring congestion in production it first compares current ways to measure congestion using nonparametric specifications of technologies in particular it focuses on the magnitude and incidence of the congestion detected in empirical studies using traditional radial efficiency measures thereafter it shows the limitations of this radial measurement and how alternative measurement schemes may reveal higher amounts of congestion then the new more general methodology of measuring s congestion is presented in particular we first present a numerical example to illustrate the way the s disposable technologies allow to capture more extreme forms of congestion by setting empirically determined upper bounds to the wasting of inputs then an empirical illustration is presented based on an existing sample of data a final section concludes

the aggregate effects of sectoral reallocations abstract can a one time permanent change in the fundamentals behind the sectoral composition of the economy prompt an aggregate downturn can this downturn be non negligible even if one uses us data to determine the relative size of gross vs net job flows and the importance of job creation costs can one consider the military build down of the 1990s as a plausible cause for the 1990 1991 recession do sectoral reallocations generate responses that are qualitatively similar to productivity shocks we use a variant of the mortensen pissarides 1994 review of economic studies 61 397 415 job creation destruction model calibrate it to us labor market data and run experiments that suggest one can answer yes to all these questions

structural change in a multisector model of growth we study a multi sector model of growth with differences in tfp growth rates across sectors and derive sufficient conditions for the coexistence of structural change characterized by sectoral labour reallocation and constant aggregate growth path the conditions are weak restrictions on the utility and production functions commonly applied by macroeconomists we present evidence from us two digit industries that is consistent with our predictions about structural change and successfully calibrate the historical shift from agriculture to manufacturing and services we show quantitatively that reasonable deviations from our conditions do not have a big impact on the properties of the model

contestable markets an uprising in the theory of industry structure presents a transcript of the presidential address delivered at the 94th meeting of the american economic association on december 29 1981 discussion of developments in the theory of industry structure welfare attributes of contestable markets behavior characteristics of oligopoly equilibrium intertemporal vulnerability to inefficient entry ebsco

beyond balanced growth balanced growth models are commonly used in macroeconomics because they are consistent with the well known kaldor facts regarding economic growth these models however are inconsistent with one of the most striking regularities of the growth process the massive reallocation of labour from agriculture into manufacturing and services this paper presents a simple model consistent with both the kaldor facts and the dynamics of sectoral labour reallocation

population age structure and consumption expenditure composition evidence from european countries abstract this paper aims at evaluating the effect of population age structure on households aggregate preferences and through this channel on the sectoral composition of the final consumption expenditure the analysis of european coicop 2 digit data shows that the contribution of demographic dynamics to model fit is highly relevant only slightly lower than the contribution of the income effect

nash marginal abatement cost estimation of air pollutant emissions using the stochastic semi nonparametric frontier abstract emissions trading or cap and trade is a market based approach providing economic incentives for achieving reductions in the emissions of pollutants marginal abatement costs mac also termed shadow prices of air pollution emissions provide valuable guidelines to support environmental regulatory policies for co2 so2 and nox the key contributors to climate change smog and acid rain this study estimates the marginal abatement cost of undesirable outputs with respect to the nash equilibrium on the stochastic semi nonparametric envelopment of data stoned in an imperfectly competitive market considering an endogenous price function of electricity the mixed complementarity problem micp is formulated to identify the nash equilibrium in a production possibility set the proposed model addresses the four issues of mac estimation in the existing literature applying the proposed method to an empirical study of 33 coal fired power plants operating in china in 2013 shows that stoned provides a robust frontier that is not sensitive to the outlier and the proposed interval of mac estimation validates the shadow prices corresponding to the nash equilibrium in an imperfectly competitive market

the shadow prices of co2 and so2 for chinese coal fired power plants a partial frontier approach abstract shadow prices are widely employed in guiding environmental policies this paper contributes to the literature by developing a novel partial frontier approach for estimating shadow prices the proposed method is advanced in handling outliers and provides a precise estimation of the marginal rate of substitution along the production frontier to cope with the different disposability characteristics of undesirable emissions so2 is treated as an environmental input that is strongly disposable because most different undesirable outputs are jointly reduced this study is the first to use directional derivatives instead of partial derivatives and proposes a new separation method that separates individual directional shadow price from the cost of joint reduction of multiple undesirable outputs we apply the proposed method to a sample of 93 coal fired power plants covering six years the estimated average shadow prices of co2 and so2 are 69 tonne and 2525 tonne under the newly developed partial frontiers when assuming some undesirable output to be strongly disposable both shadow prices fall 20 32 tonne and 1018 23 tonne the present paper suggests the estimated shadow prices will be much different across different levels of disposability the cost of joint reduction is calculated as 91 05 unit given the current production level which leads to a directional shadow price for the two undesirable outputs of 91 32 tonne and 1250 06 tonne the estimated shadow prices for both undesirable outputs dispersed widely under the partial frontiers spatial distribution of estimated shadow prices shows that coastal provinces and municipalities have higher co2 shadow prices but lower so2 shadow prices whereas the northeast provinces are the opposite the co2 shadow price is comparatively stable over the study period while the so2 shadow price fluctuates policy implications are discussed

shadow prices and pollution costs in u s agriculture abstract we use the directional output distance function to derive estimates of production inefficiency shadow prices for polluting outputs and the associated pollution costs using a quadratic functional form for the directional output distance function and data for the u s agricultural sector during 1960 1996 we find that the pollution costs the shadow values from the runoff and leaching of pesticides are 6 of crop and animal revenues and are highest in the midwest and lowest in the western states if states were to reduce technical inefficiency and operate on the production frontier pollution costs could be reduced by 7

can traditional theories of structural change fit the data two traditional explanations for structural changes are sector biased technological progress and non homothetic preferences this paper integrates both into an otherwise standard growth model and quantitatively evaluates them vis a vis time series the exercise identifies a set of puzzles for standard theories i the model cannot account for the steep decline in manufacturing and rise in services in the later data ii the standard model requires implausibly low elasticity of substitution across goods to match the consumption and output data and iii the behavior of consumption and output shares differs significantly from that of employment shares we argue that models that incorporate home production sector specific factor distortions and differences across sectors in the accumulation of human capital are promising avenues to amend the standard models jel o11 o14 o41

optimal investment in product flexible manufacturing capacity this paper presents a model and an analysis of the cost flexibility tradeoffs involved in investing in product flexible manufacturing capacity flexible capacity provides a firm with the ability to respond to a wide variety of future demand outcomes but at the expense of the increased cost of acquiring flexible manufacturing capacity as compared with dedicated or nonflexible capacity we formulate the product flexible manufacturing capacity investment decision as a two stage stochastic program in the first stage the firm must make its investment decision in manufacturing capacity before the resolution of uncertainty in product demand in the second stage after demand for products are known the firm implements its production decisions constrained by the first stage investments the main contributions of this paper are threefold first we develop a model of the firm s flexible manufacturing investment decision that conceptually captures some of the key characteristics of this complex decision probl

governance and renewable energy investment in mena countries how does trade matter abstract the middle east and north africa mena countries have recently developed renewable energy re markets however their rate of investment in renewable energy remains small compared to other regions in the world despite their relatively abundant endowments particularly in wind and solar while the literature identifies some barriers to investment in renewable energy we assume that the investment of mena countries could be impeded by specific governance factors furthermore we consider recent literature showing that trade openness reduces the negative effects of weak governance in this paper we empirically investigate the link between governance openness and renewable energy investment in the mena region using panel data for 15 mena countries over the period 1996 2013 our results prove that high institutional quality is associated with re investment in mena countries in addition this relationship seems to be conditional on the trade regime our results are robust to several measures of renewable energy investment and governance as well as to an alternative econometric set up

the measurement of productive efficiency a reconsideration the purpose of this paper is to generalize the farrell indexes of productive efficiency to nonhomothetic production technologies and at the same time maintain the cost interpretation of the farrell measures since the generalized indexes rely heavily on recent developments in the estimation of frontier cost and production functions several frontier models are reviewed in addition to generalized indexes of technical allocative and overall productive efficiency a variety of single factor efficiency measures are discussed the applicability of the proposed efficiency measures is illustrated with a numerical example of electric power generation

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

eco efficiency outcomes of mergers and acquisitions in the european electricity industry abstract the european electricity industry was recently liberalized in response there was a surge of mergers and acquisitions m as this study addresses the effects of m as on the eco efficiency of european electricity producers in 2005 2013 the environmental production technology comprises co2 emissions as an undesirable output i compute eco efficiency using data envelopment analysis dea and the malmquist luenberger productivity index which are both based on radial directional distance function i observe a decreasing trend in average eco efficiency which contradicts the previously documented moderate efficiency gains of liberalization the effects of m as are isolated using second step fractional regression the domestic horizontal m as which are systematically regulated by the european commission have no impact although one cross border horizontal deal has a same year effect of roughly 3 this effect becomes approximately 1 5 over a two year timespan vertical domestic m as have a short run negative impact of 3 6 that does not persist over time vertical international m as reduce the eco efficiency by 2 1 two years after their completion limited evidence suggests that the conglomerate deals are at least not harmful the policy implication is that the merger regulation should be based on dea eco efficiency measures regulators should devote more attention to cross border m as and particularly to vertical deals

military service and political behavior evidence from france abstract we investigate the impact of compulsory military service on turnout and political preferences exploiting the suspension of mandatory conscription for french men we observe a significant and positive impact of military service on turnout we estimate that the service increases turnout by approximately 7 percentage points we also investigate the impact of conscription on political preferences when we control for selection into the military service we observe no support for a change in preferences of former conscripts

weak disposability in nonparametric production analysis with undesirable outputs environmental economics and natural resources group at wageningen university in the netherlands weak disposability of outputs means that firms can abate harmful emissions by decreasing the activity level modeling weak disposability in nonparametric production analysis has caused some confusion this article identifies a dilemma in these approaches conventional formulations implicitly and unintentionally assume all firms apply uniform abatement factors however it is usually cost effective to abate emissions in those firms where the marginal abatement costs are lowest this article presents a simple formulation of weak disposability that allows for non uniform abatement factors and preserves the linear structure of the model

evaluating the performance of chinese fossil fuel power plants by data environment analysis an application of three intermediate approaches in a time horizon abstract to our knowledge the previous studies did not answer the following questions how much does window analysis differ from the original data envelopment analysis dea approaches and how to develop dea window analysis to address these questions we propose three intermediate approaches cross sectional approach window efficiency analysis and window index approach and statistically compare their performances the underlying concern is that we need to examine whether a metrological bias exists in our study the concern is important in guiding policy issues such as energy policy and climate change empirically the proposed approaches are applied to measure the unified efficiency of fossil fuel power plants at a provincial level in china from 2007 to 2017 since these plants are important energy consumers and co2 emitters we obtain two important implications first considerable differences were confirmed among the three approaches thus implying an existence of the methodological bias second beijing the capital of china outperformed the other provinces in terms of their measures since the government has paid serious attention to air pollution emitted from fossil fuel power plants the governmental regulation in beijing is a good example of pollution prevention in china it is expected that the success on beijing will be disseminated to the other provinces

preference shifts between consumption goods and sectoral changes abstract this paper analyzes under which conditions a shift in the relative preferences between consumption goods may induce a change in the equilibrium values of the sectoral variables in the same direction compared with the previous static equilibrium