efficiency growth and concentration an empirical analysis of hospital markets taking an evolutionary view of markets harold demsetz hypothesized that firms differ persistently in efficiency and that industry concentration results from growth of efficient firms at the expense of inefficient ones we test the hypothesis with high quality microdata from the us hospital industry an industry of keen policy and scientific interest we measure efficiency by firm in the early 1980s and relate it to subsequent growth of efficient firms to the persistence of profit differences and to changes in the concentration of markets initial hospital efficiency and subsequent growth and profitability are significantly and positively related also greater initial variation in hospital efficiency within local markets is positively related to subsequent growth in market concentration these findings support the logic of demsetz s evolutionary efficiency hypothesis though they cannot confirm the stronger idea that variation in firm efficiency is the dominant explanation for changes in concentration

multiproduct short run hospital cost functions empirical evidence and policy implications from cross section data economists and policymakers have been interested in hospital costs and the structure of hospital technologies for several decades now early interest was focused on the possibility of scale economies which implied increased efficiency for larger hospitals 6 8 12 13 18 20 while more recent interest has been stimulated by the inflationary spiral of hospital costs 1 15 17 22 as hospital costs have risen important policy questions concerning the impact on costs of the hospitals diagnostic case mix the hospitals admitting physicians the hospitals size and the hospitals efficiency have emerged and researchers have attempted to deal with these issues within the context of increasingly complex econometric models 1 2 5 24 27 however in attempting to analyze these important policy issues researchers have been forced to make two major types of compromises on the one hand appropriate data are often not available for estimating a well specified cost function e g information on admitting physicians and diagnostic case mix are often missing so that problems of specification error often plague the econometric results conversely in using imaginative ways to deal with data problems e g weighting in patient and out patient care to form a single index of hospital services 1 27 or estimating separate cost functions for each department in the hospital 2 researchers sometimes place unrealistic and unnecessary constraints on their econometric models the purpose of this study is to analyze the impact of several of the primary hospital characteristics mentioned above on the short run costs of hospitals within a theoretically consistent framework in the following discussion we also develop the theoretical

productivity and efficiency with discrete variables and quadratic cost function abstract we propose an index of productivity based on a quadratic cost function and developed for discrete data including technical and allocative inefficiency jointly with technical change and returns to scale as determinants of total factor productivity this new index is applied to spanish stevedoring industry so as to identify the sources of change in the productivity of a multiproductive activity where some companies do not produce some of the outputs in this context the functional quadratic form and the productivity index proposed prove particularly useful

environmental federalism and environmental liability abstract environmental federalism considers what level of government should optimally regulate pollution this paper addresses this question for accidental pollution which government regulates through the ex post liability regimes of either negligence or strict liability we find that decentralizing the choice between these regimes does not in general induce the socially optimal outcome when firms can pay all damages all regions may choose negligence and impose an overly strict standard of due care when firms may be bankrupted by damages all regions may choose strict liability which induces too little care in addition asymmetric equilibria are possible in which some regions choose negligence others strict liability combining negligence with a pigovian tax or strict liability with a bonding requirement can align regional authorities incentives with those of a central government

a hedonic prices approach to hospitalization costs the case of israel the paper suggests a hedonic prices approach to estimate the cost of hospital services it applies this approach to israeli data as a first approximation of hospitalization costs in that country in the absence of accounting data this approach enables us to estimate the relative cost of basic hospital services how hospital characteristics affect cost and how cost changes with time moreover it provides for a standardized measure to view the relative efficiency of a cross section of hospitals several findings based on israeli data demonstrate the potential of the approach and may be of general interest first controlling for department mix bigger hospitals which are usually also teaching hospitals and may have a different case mix incur higher cost per admission than smaller hospitals second by institution general sick fund hospitals are more expensive but also experience in terms of budget allocations less discrimination than government hospitals hence provision of equitable service may be less efficient than in services where there is budgetary discrimination to induce specialization etc third hospitals have been subject to inflationary pressures over and above the general inflation level in israel as may be the case in most other western countries fourth a comparison of cost per admission across hospitals and over time shows that cost has been consistently increasing in particular hospitals and falling in others beyond the average increases warranted by growth in size changes in composition and hospitalization specific inflation more research is needed in order to explain these unexplained but consistent trends

the impacts of membership in multi hospital systems on cost productivity growth and technical change abstractwe examine whether affiliation in a multi hospital system contributes to higher rates of total factor productivity tfp growth technological progress and cost efficiency with a 1996 to 1999 panel of 248 us hospitals some are private nonprofit church related and other nonprofit and the remaining are public government nonfederal empirical results indicate that urban system member hospitals experienced higher rates of both tfp growth and technical progress than the rates of tfp growth and technical progress experienced by urban nonsystem hospitals rural system member hospitals experienced smaller rates of both tfp decline and technical regress than the rates of tfp decline and technical regress experienced by rural nonsystem hospitals

why do some households trade so much when agents can learn about their abilities as active investors they rationally trade to learn even if they expect to lose from active investing the model used to develop this insight draws conclusions that are consistent with empirical study of household trading behavior households portfolios underperform passive investments their trading intensity depends on past performance and they begin by trading small sums of money using household data from finland the article estimates a structural model of learning and trading the estimated model shows that investors trade to learn even if they are pessimistic about their abilities as traders it also demonstrates that realized returns are significantly downward biased measures of investors true abilities the author 2011 published by oxford university press on behalf of the society for financial studies all rights reserved for permissions please e mail journals permissions oup com oxford university press

the costs and beliefs implied by direct stock ownership this paper develops and estimates an economic model of the costs and beliefs required to rationalize household direct stock ownership in the model investors believe they can learn information about individual stock returns through costly research the model identifies the distributions of both research costs and beliefs about the predictability of individual stock returns identification depends only on households wealth and portfolio choices the model also provides a novel explanation for many empirical features of household portfolios parameter estimates suggest that most households have modest beliefs about the benefits of individual stock research although a minority must expect extraordinary returns data are available at https doi org 10 1287 mnsc 2017 2791 this paper was accepted by neng wang finance

cost and efficiency in nursing homes a stochastic frontier approach abstract the average level of cost inefficiency in new york nursing homes is estimated at 29 based on a two year panel of 164 skilled nursing facilities and 443 combination skilled and health related facilities the stochastic frontier cost function is fit to the data utilizing the composed error model wherein statistical noise and allocative and technical inefficiency are jointly estimated there is no change in efficiency between 1987 and 1990 and it does not vary between for profit and not for profit homes excessive managerial and supervisory personnel and diseconomies of size are linked to inefficient operation chronic excess demand is suggested as a cause of the high level of inefficiency

efficiency outcomes of market concentration and managed care abstract the paper examines how hospital cost efficiency has reacted to extensive horizontal integrations of hospitals and rapid growth of managed care in the us health care industry cost efficiency is estimated by using panel data approaches to relax the assumptions for the hospital effects imposed in earlier studies the paper shows that higher managed care penetration over time is associated with greater hospital efficiency and higher market concentration is positively associated with efficiency when markets are highly competitive or highly concentrated

estimation of profit functions when profit is not maximum this paper deals with derivation and implications of profit functions when profit is not maximum due to the presence of either technical inefficiency or allocative inefficiency or both we show that input demand and output supply elasticities and returns to scale are in general affected by these inefficiencies we also show that the overall profit efficiency is not necessarily the product of technical and allocative efficiencies meaning that technical and allocative inefficiencies are not necessarily independent estimation techniques are developed for both cross sectional and panel data models working of the model is illustrated using a panel of 60 salmon farms copyright 2001 oxford university press

non minimum cost functions and the stochastic frontier on applications to health care providers by allowing firms to deviate from their optimal path for systematic reasons frontier estimators in the general literature have helped to inject more realism into econometric modelling of firms and now of hospitals and nursing homes as well unfortunately one such estimator the dea technique employed by kooreman does not allow for a stochastic error term in practice all random noise in the dea is lumped together with the true inefficiency making the resulting inefficiency scores suspect the stochastic frontier model has the advantage of disentangling the two sources of error for this reason i will address most of my comments to the papers in this issue by vitaliano and toren and by zuckerman et al that rely on maximum likelihood estimators mle another way to estimate the stochastic frontier is by using panel data techniques although the latter approach is not represented in this compendium it has certain advantages over mle which i will touch upon briefly i will also discuss other approaches that are derived more directly from economic theory that have not yet received much attention

the impact of hospital market structure on patient volume average length of stay and the cost of care a variety of recent proposals rely heavily on market forces as a means of controlling hospital cost inflation sceptics argue however that increased competition might lead to cost increasing acquisitions of specialized clinical services and other forms of non price competition as means of attracting physicians and patients using data from hospitals in 1972 we analyzed the impact of market structure on average hospital costs measured in terms of both cost per patient and cost per patient day under the retrospective reimbursement system in place at the time hospitals in more competitive environments exhibited significantly higher costs of production than did those in less competitive environments

measuring hospital efficiency with frontier cost functions this paper uses a stochastic frontier multiproduct cost function to derive hospital specific measures of inefficiency the cost function includes direct measures of illness severity output quality and patient outcomes to reduce the likelihood that the inefficiency estimates are capturing unmeasured differences in hospital outputs models are estimated using data from the aha annual survey medicare hospital cost reports and medpar we explicitly test the assumption of output endogeneity and reject it in this application we conclude that inefficiency accounts for 13 6 percent of total hospital costs this estimate is robust with respect to model specification and approaches to pooling data across distinct groups of hospitals

decentralized and efficient control of transboundary pollution in federal systems abstract decentralized control of transboundary pollution in federal systems can be efficient when population crowding is socially costly in this paper an upstream region abates pollution or makes an interregional income transfer to the downstream region with the sole intent of deterring immigration because either instrument abatement expenditure or interregional income transfer alone implements an efficient population distribution between the regions interregional income transfers are unnecessary for efficiency without explicit income transfers each region provides the efficient portion of the aggregate level of pollution abatement in the nash equilibrium

population mobility and transboundary environmental problems abstract a standard result in the literature on environmental economics is that efficient environmental policies regulating transboundary pollution will be adopted only if there is interjurisdictional coordination efficient policies can be adopted as a result of interregional treaties or mandated by a central authority the present paper demonstrates that if there is perfect population mobility between the regions affected by the transboundary pollution the efficient outcome is a nash equilibrium of the policy game between regional authorities this is true independently of what policies are available to the regional authorities however there may be more than one nash equilibrium so that policy coordination may be necessary in order to achieve the best equilibrium

correlated pollutants interregional redistribution and labor attachment in a federation we examine the efficiency of federal policies in a federation characterized by decentralized leadership imperfect labor mobility and transboundary pollution selfish regional governments regulate correlated pollutant emissions by choosing pollution tax and abatement levels in anticipation of the center s redistributive policy the center s objective function obeys a proportional equity principle which implies that its choice of interregional transfer satisfies the equalization of weighted regional welfare levels regional and central governments make their choices subject to migration incentives we show that the subgame perfect equilibrium for the sequential game played by regional and central governments yields socially optimal policies

iq and stock market participation stock market participation is monotonically related to iq controlling for wealth income age and other demographic and occupational information the high correlation between iq and participation exists even among the affluent supplemental data from siblings studied with an instrumental variables approach and regressions that control for family effects demonstrate that iq s influence on participation extends to females and does not arise from omitted familial and nonfamilial variables high iq investors are more likely to hold mutual funds and larger numbers of stocks experience lower risk and earn higher sharpe ratios we discuss implications for policy and finance research

estimation of output and input technical efficiency using a flexible functional form and panel data the farrell 1957 concept of technical efficiency can be measured in two ways denoted output and input technical efficiency the empirical literature does not distinguish between the two measures and confusion exists regarding the required restrictions on technology for the specification of either measure with panel data the authors show how both types of efficiency when treated as fixed effects are to be specified in the context of a translog cost system technical efficiency enters the share equations only in the output case when homotheticity is not imposed the authors estimate their cost systems using panel data on u s airlines copyright 1994 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

technology and efficiency in a panel of italian dairy farms an sgm restricted cost function approach this article employs a short term specification of the symmetric generalised mcfadden sgm cost function capable of accommodating quasi fixed factors and variable returns temporary equilibrium and scale economies are investigated while maintaining the consistency of the estimated model with microeconomic theory and approximation properties it also makes use of a two step procedure to estimate first the technology parameters and then time varying efficiency at farm level no distributional assumptions are required on efficiency as we consider a fixed effect model a balanced panel of italian dairy farms during the years from 1980 to 1992 serves as the case study the results suggest a rigid productive structure during the pre and post quota period moreover italian milk producers are found to exhibit considerable excess capacity and rather low input technical efficiency

interactions between hospital admissions cost per day and average length of stay hospital cost per day cost annual admissions per capita admit and average length of stay alos are important health policy variables because each variable provides important information about hospital industry performance this study uses country level data to explore the empirical relationships between cost admit and alosin three steps ols estimation application of the wu hausman endogeneity test and re estimation with two stage least squares the major results are i admitand alosexert exogenous influences on costand ii admitand alosare endogenously related with possible one way casuality from admitto alos

econometric estimation of technical and environmental efficiency an application to dutch dairy farms in this article we estimate the technical and environmental efficiency of a panel of dutch dairy farms nitrogen surplus arising from the application of excessive amounts of manure and chemical fertilizer is treated as an environmentally detrimental input a stochastic translog production frontier is specified to estimate the output oriented technical efficiency environmental efficiency is estimated as the input oriented technical efficiency of a single input the nitrogen surplus of each farm the mean output oriented technical efficiency is rather high 0 894 but the mean input oriented environmental efficiency is only 0 441 intensive dairy farms are both technically and environmentally more efficient than extensive farms

energy savings potential in china s industrial sector from the perspectives of factor price distortion and allocative inefficiency abstract china s industrial energy consumption accounted for 70 82 of national and 14 12 of world energy usage in 2011 in the context of energy scarcity and environmental pollution the industrial sector in china faces unsustainable growth problems by adopting the stochastic frontier analysis sfa framework this paper analyzes the factor allocative efficiency of china s industrial sector and estimates the energy savings potential from the perspective of allocative inefficiency this paper focuses on three issues the first is examining the factor allocative inefficiency of china s industrial sector the second is measuring factor price distortion by the shadow price model the third is estimating the energy savings potential in china s industrial sector during 2001 2009 major conclusions are thus drawn first factor prices of capital labor and energy are distorted in china due to government regulations moreover energy price is relatively low compared to capital price while is relatively high compared to labor price second the industry wide energy savings potential resulted from energy allocative inefficiency was about 9 71 during 2001 2009 the downward trend of energy savings potential implies the increasing energy allocative efficiency in china s industrial sector third a transparent and reasonable pricing mechanism is conducive to improving energy allocative efficiency

financial speculators underperformance learning self selection and endogenous liquidity we develop an equilibrium model of learning by rational traders to reconcile several empirical regularities cross sectionally most individual speculators lose money large speculators outperform small speculators past performance positively affects subsequent trade intensity most new traders lose money and cease speculation and performance shows persistence learning from trading generates substantial endogenous liquidity reducing bid ask spreads and the impact of exogenous liquidity shocks on asset prices but amplifying the effects of real shocks introducing slightly overconfident traders increases bid ask spreads hurting all traders finally behavioral theories cannot reconcile all of these empirical regularities

human capital risk and economic growth this paper develops a tractable incomplete markets model of economic growth in which households invest in risk free physical capital and risky human capital the paper shows that a reduction in uninsurable idiosyncratic labor income risk decreases physical capital investment but increases human capital investment growth and welfare a quantitative analysis based on a calibrated version of the model reveals that these effects are substantial and of the same order of magnitude as the effects of distortionary income taxation the analysis further suggests that government sponsored severance payments to displaced workers increase growth and welfare even if these payments have to be e nanced through distortionary income taxation

a reexamination of returns to scale density and technical progress in u s airlines the logic of protecting u s airlines from competition was initially founded on the belief that substantial economies of scale existed in the industry and that consumers would benefit through among other things regulation of fares regulation of service network and restrictions on entry and exit from the industry however studies 1 7 8 12 have undermined the faith in economic regulation by showing that economies of scale were minimal and competition would promote efficiency in a recent study caves christensen and tretheway 5 estimated returns to scale rts and returns to density rtd for u s airlines based on a panel dataset for 1970 1981 containing trunk and local service airlines they estimated rtd and rts from a translog cost function for airline services like many other applied economists working with translog cost functions they found that the neoclassical curvature or regularity conditions on the cost function are not satisified in almost half of the observations 105 out of 208 in general concavity property is satisfied in the neighborhood of the sample mean if it is chosen as the point of approximation for the cost function but not at points further from the mean recently diewert and wales 6 suggested alternative flexible functional forms which are globally concave in input prices if the concavity property is satisfied at only one point thus if the concavity property is violated imposition of it at a single point will make the function globally concave without destroying flexibility use of such functional forms can avoid violation of regularity conditions of the cost function at extreme points the objective of this paper is to estimate a model of airline costs along the lines of caves christensen and tretheway 5 however we extend their results in several ways first we consider a modest generalization of the symmetric generalized mcfadden sgm cost function developed by diewert and wales by including network and control variables in the airline cost function the sgm cost function is flexible and globally concave in input prices thus our estimates of parameters and measures of rts rtd and technical progress are based on a cost function which is globally concave second we estimate the system of input demand functions instead of the cost function and while estimating these input demand functions derived from the cost minimizing behavior of the airlines we incorporate firm and input specific effects these effects capture possible differences in production technologies among airlines third we intro

cost efficiency of electric grid utilities in china a comparison of estimates from sfa mle sfa bayes and stoned cnls with the purpose of estimating the range of cost efficiency levels of the power grid sector in china we assembled a data set including 23 provincial power grid companies spanning from 2005 to 2009 and conducted an empirical study based on the sfa mle sfa bayes and stoned cnls methodologies empirical results show that the average values of efficiency from different models vary from 0 85 to 0 92 depending especially on the assumptions underlying inefficiency content further results demonstrate that there is exogenous technical progress during the sample period and per capita gdp of the province is negatively related to the costs of the electric grid company located in the corresponding province we hope this empirical study will contribute to the debate on an efficiency based regulation scheme which was introduced to the chinese electric grid sector on a pilot base in 2014

scale and scope efficiencies through hospital consolidations the hospital sector in the province of ontario has recently completed a large scale restructuring marked by wide ranging hospital closures mergers and program transfers given a generally inconclusive economics literature regulators used an accounting as opposed to an economic approach when predicting gains to consolidations this paper uses an economic cost function to examine economies of scale and scope in the years preceding restructuring where there was little doubt that economies were possible issues relating to output aggregation functional form and scale and scope testing are addressed and an equilibrium cost function is derived from an estimated short run function to measure the cost concepts of interest using index and direct approaches we examine a variety of potential reconfigurations and conclude that there were indeed large scale unexploited gains to strategic consolidation in the hospital sector furthermore these gains may not have been detected using standard approaches in the literature

why are ceos rarely fired evidence from structural estimation i evaluate the forced ceo turnover rate and quantify effects on shareholder value by estimating a dynamic model the model features learning about ceo ability and costly turnover to fit the observed forced turnover rate the model needs the average board of directors to behave as if replacing the ceo costs shareholders at least 200 million this cost mainly reflects ceo entrenchment rather than a real cost to shareholders the model predicts that shareholder value would rise 3 if we eliminated this perceived turnover cost all else equal the model also helps explain the relation between ceo firings tenure and profitability

econometric models of limit order executions we develop and estimate an econometric model of limit order execution times using survival analysis and actual limit order data we estimate versions for time to first fill and time to completion for both buy and sell limit orders and incorporate the effects of explanatory variables such as the limit price limit size bid offer spread and market volatility execution times are very sensitive to the limit price but are not sensitive to limit size hypothetical limit order executions constructed either theoretically from first passage times or empirically from transactions data are very poor proxies for actual limit order executions r 2002 elsevier science b v all rights reserved jel classification g23

interregional spillovers in the presence of perfect and imperfect household mobility abstract when households are immobile across regions the decentralized provision of public goods that generate interregional benefit spillovers is inefficiently low we analyze this problem in an environment of interregional household migration and obtain the following results if households are perfectly mobile across regions then the decentralized provision of public goods generating spillovers is socially efficient there is no need for central government intervention if households are attached to particular regions for cultural or nationalistic reasons however at least one of two regions undersupplies the public good central government intervention can enhance efficiency

economic inefficiency and environmental impact an application to aquaculture production abstract in industries characterized by frequent innovation and high productivity growth substantial variation in produced quantity and input use may occur leading to increased costs an effect that has received little attention is that inefficiency can exacerbate environmental impacts this effect is particularly important if environmentally damaging inputs are overused in addition to increasing firms costs such inefficiency can also increase the environmental impact of the firm s activity this makes the degree of inefficiency in an industry an issue for environmental regulators in this paper we estimate technical and allocative efficiency for a sample of norwegian salmon farmers our results show that both technical and allocative inefficiency on average are significant in explaining the level and variation in farm costs and that the main environmental impact due to inefficiency from the norwegian salmon aquaculture industry has its origin in technical inefficiency

is hospital competition socially wasteful we study the consequences of hospital competition for medicare beneficiaries heart attack care from 1985 to 1994 we examine how relatively exogenous determinants of hospital choice such as travel distances influence the competitiveness of hospital markets and how hospital competition interacts with the influence of managed care organizations to affect the key determinants of social welfare expenditures on treatment and patient health outcomes in the 1980s the welfare effects of competition were ambiguous but in the 1990s competition unambiguously improves social welfare increasing hmo enrollment over the sample period partially explains the dramatic change in the impact of hospital competition

technical efficiency and farm size a conditional analysis the relationship between technical efficiency and size might be affected by farm heterogeneity we analyse this relationship conditional on a set of control variables these control variables are chosen using a production model where technical efficiency is introduced as a parameter as a result technical efficiency affects both the input demand and the output supply of a profit maximising producer the empirical application explores these issues using panel data of dairy farms in spain

technical efficiency of alternative farming systems the case of greek organic and conventional olive growing farms abstract olive growing is a major farming activity in greek agriculture this paper analyzes empirically the technical efficiency of organic and conventional olive growing farms using a stochastic production frontier methodology and a translog functional specification findings indicate that the organic olive growing farms examined exhibit a higher degree of technical efficiency relative to their production frontier than do conventional olive growing farms reasons may include lower profit margins and restrictions on inputs permitted thus forcing organic farmers to be more cautious with input use however both input and output oriented technical efficiency scores are still relatively low for both types of olive farming thus there is considerable scope for cost reducing and farm income improvement in both farming modes this could prove crucial for the long run viability and the future course of the sector

behavioural differences among hospitals it is ownership or location by about 1988 the consensus among leading health economists was that no meaningful differences existed among hospitals of differences owernership form and this position was embraced by the antitrust division of the us department of justice but behavioural differences among hospitals of different among hospitals of different owernership has continued to be a matter of both academic and judicial interest recent empirical studies have concluded that real differences do exist while many earlier studies reached the opposite conclusion this contradiction in finding over time as competition intensified is exactly opposite to what expense preference theory would predict we examine this apparent paradox using a very general test of behavioural differences by hospital ownership we find that the omission of location specific variables can lead to biased estimates of ownership effects and that no significant behavioural differences exist among private california hospitals in 1986 90 when this source of o

testing scale efficiency in dea models a bootstrapping approach this paper presents a method for estimation and test of firm specific scale efficiency using data envelopment analysis dea the use of a simple bootstrap algorithm is proposed to perform firm specific inference for scale efficiency an empirical application using swedish hospital data is provided it is found that about 40 of the departments were scale efficient according to the original results however for about one third of those departments the hypothesis of scale efficiency could be rejected

why don t we agree evidence from a social network of investors we study sources of investor disagreement using sentiment of investors from a social media investing platform combined with information on the users investment approaches e g technical fundamental we examine how much of overall disagreement is driven by different information sets versus differential interpretation of information by studying disagreement within and across investment approaches overall disagreement is evenly split between both sources of disagreement but within group disagreement is more tightly related to trading volume than cross group disagreement although both sources of disagreement are important our findings suggest that information differences are more important for trading than differences across market approaches

attachment to home and efficient purchases of population in a fiscal externality economy abstract this paper examines the efficiency properties of an economy characterized by strategically competing regions and individuals with varying degrees of attachment to home in an otherwise standard fiscal externality setting regional authorities may make interregional transfers in purchasing preferred populations however there is a range of distributions of resources over which neither region makes transfers nevertheless all equilibrium allocations resulting from the nash behavior of regional authorities including those that involve no transfers are efficient therefore in contrast to the standard conclusions of the fiscal externality literature there is no efficiency role for a central authority

economic efficiency and frontier techniques abstract most of the literature related to the measurement of economic efficiency has based its analysis either on parametric or on non parametric frontier methods the choice of estimation method has been an issue of debate with some researchers preferring the parametric and others the non parametric approach the aim of this paper is to provide a critical and detailed review of both core frontier methods in our opinion no approach is strictly preferable to any other moreover a careful consideration of their main advantages and disadvantages of the data set utilized and of the intrinsic characteristics of the framework under analysis will help us in the correct implementation of these techniques recent developments in frontier techniques and economic efficiency measurement such as bayesian techniques bootstrapping duality theory and the analysis of sampling asymptotic properties are also considered in this paper

a multiple output multiple input model of the hospital industry in north carolina 1983 a multiple output multiple input model of the hospital industry in north carolina applied economics vol 15 no 3 pp 341 352

frontier estimation how useful a tool for health economics the journal is pleased to publish in this issue three papers that apply frontier estimation techniques to hospitals and nursing homes together with an exchange over the usefulness of those techniques in the health care context the papers represent the current state of the art with respect to applications of frontier estimation in health care because of the growing popularity of the technique no doubt in part from its availability in standard software packages it seems useful to take this opportunity to appraise its usefulness one might begin by asking usefulness for what assuming one could define a frontier with certainty how would one use such knowledge a straightforward application in health care appears to be to reimbursement because both data envelopment analysis dea and stochastic frontier estimation specify the least cost mix of inputs for a given output both methods can in principle be used to determine whether a given firm hospital or nursing home is efficient and if the answer to that question is no the magnitude of any inefficiency it is not a large step from that information to the notion that a regulator should reduce the firm s budget by the amount of the measured inefficiency indeed vitaliano and toren mention the boren amendment s requirement that the medicaid program reimburse hospitals and nursing homes at the cost incurred by an efficiently operated

the specification of a hospital cost function a comment on the recent literature in the empirical estimation of hospital cost functions two radically different types of specifications have been chosen to date ad hoc forms and flexible functional forms based on neoclassical production theory this paper discusses the respective strengths and weaknesses of both approaches and emphasizes the apparently unreconcilable conflict between the goals of maintaining functional flexibility and keeping the number of variables manageable if at the same time patient heterogeneity is to be adequately reflected in the case mix variables a new specification is proposed which strikes a compromise between these goals and the underlying assumptions are discussed critically

transboundary environmental problems with mobile but heterogeneous populations most of the literature on transboundaryenvironmental problems treats population ineach country or region as constant ignoringpopulation mobility we showed previously thatif there is perfect population mobility betweenregions and populations are homogeneous asocially efficient outcome can be supported asa nash equilibrium of the game of uncoordinatedpolicy setting even without any internationalenvironmental agreement in the present paperwe introduce heterogeneous population and showthat when people differ a non cooperativeoutcome is generally inefficient we alsodemonstrate that for a particular set ofobjective functions for the regionalgovernments there is an equilibrium of thegame of uncoordinated policy setting that isefficient finally we give an example wherethe decentralized outcome is efficient whenthere is no population mobility butinefficient when there is population mobility

the trading profits of soes bandits1 abstract soes bandits are individual investors who use nasdaq s small order execution system soes for day trading their average profit per trade is small but they trade dozens or hundreds of times per week bandits usually establish a position before most market makers have updated their quotes and lay off the position at favorable prices through instinet or selectnet it is noteworthy that they trade profitably with market makers despite having less information bandits keep the profits and bear the losses from their trades thus they have greater incentives to trade well than the employees of market making firms

economic inefficiency in a revenue setting the norwegian whitefish fishery the main focus in the inefficiency literature is on suboptimal input use and how this causes increased costs due to technical and allocative inefficiency production or cost functions are then typ

interregional interactions and population mobility the institutional level at which policies should be determined is an important issue that has been extensively treated in the economics literature in particular the literature has discussed to what extent decentralization of policy decisions give an inefficient outcome with a homogeneous population and perfect population mobility as it conventionally is modeled the following result is derived for a very general class of economies with interregional interactions a socially efficient outcome is a nash equilibrium of the game of decentralized and uncoordinated policy setting however if decisions about migration take a longer time to make than decisions of policy changes the general result above no longer holds with this decision sequence decentralization may give an inefficient outcome also in situations where the decentralized outcome is efficient in the absence of population mobility

technical and allocative inefficiencies and factor elasticities of substitution an analysis of energy waste in iran s manufacturing ignoring technical and allocative inefficiencies or embedding one of them alone in a system of input demands may result in biased elasticities we consider a comprehensive model including technical inefficiency in input and output forms and allocative inefficiency and apply it to panel data from iran s manufacturing sector the results show that the presence of both inefficiencies affects the computed elasticities of demand and substitution moreover in spite of current waste of energy in iran s manufacturing the elimination of environmental constraints will prompt the manufacturing firms to increase the utilization of energy relative to both capital and labor

elasticity of substitution and technical efficiency evidence from the us electricity generation abstractthe implications of national or regional energy policies for technical efficiency and environmental outcomes in electricity generation depend on fossil fuel input substitution this study u

what do retail fx traders learn what is the benefit of experience using data from a leading trading platform we find no evidence that retail fx traders learn to trade better but they do appear to learn about their innate abilities as traders and respond appropriately in particular following an unsuccessful trading day they are more likely to cease trading to trade smaller amounts and to trade less frequently these effects are stronger for younger and less experienced traders who might be expected to have more to learn than older more experienced traders as regards learning through experience surprisingly we find that more seasoned traders demonstrate a slight decline in performance once we account for the endogenous decision to cease trading and even very experienced traders consistently lose money