too big to be efficient the impact of implicit subsidies on estimates of scale economies for banks we examine whether too big to fail tbtf factors affect estimates of scale economies for large banks from a standard model of bank production that does not control for any tbtf factors we find evidence of scale economies for our sample of large banks we then control for tbtf factors by using a measure of the implicit subsidy that emerges from a reduction in tbtf banks funding costs due to investor expectations of government support we do this in two ways first we estimate scale economies from an augmented model of bank production that employs a proxy for the counterfactual price of debt that banks would face in the absence of any tbtf funding cost advantage second we estimate scale economies from a model of bank production that is estimated only for a sample of banks considered unlikely to be tbtf after controlling for tbtf factors using either method we no longer find evidence of scale economies for our sample of large banks these results suggest that estimated scale economies for large banks are affected by tbtf factors

the social costs and benefits of too big to fail banks a bounding exercise while the policy of too big to fail has received wide attention in the literature there is little agreement regarding economies of scale for financial firms we take the stand that systemic risk increases when the larger players in the financial sector have a larger share of output calculations indicate that the cost to the macro economy due to increased systemic risk is always much larger than the potential benefit due to scale economies when distributional and intergenerational issues are considered the potential benefits to economies of scale are unlikely to ever exceed the potential costs due to increased risk of a banking crisis

turkish bank efficiency bayesian estimation with undesirable outputs this paper analyzes the productivity and efficiency of turkish banks from 2002 to 2010 we obtained estimates of efficiency productivity growth and efficiency growth using a bayesian stochastic frontier approach and focused on accounting for non performing loans npls for use in our model specifically we introduce npls as a bad output in an input distance function and estimate a system of non linear equations subject to endogeneity we confirm that the productivity growth of turkish banks was positive over the period of this study which was mainly due to the improvement in technology while efficiency growth continued to be negative over the same period methodologically we also prove that not accounting for npls in estimating the frontier model might seriously distort the efficiency and productivity results the study also provides measures of shadow prices for npl and discusses the results in terms of several interesting trends in turkish banking finally the paper provides efficiency and productivity comparisons between domestic and foreign banks

application and use of the isew for assessing the sustainability of a regional system a case study in italy abstract the index of sustainable economic welfare isew was introduced by daly and cobb in 1989 in order to integrate the information embodied in gdp since economic growth implies externalities and market failures and a portion of it can be defined as uneconomic the isew method introduces some corrections and adjustments to the gdp calculation framework the isew has been calculated for a number of nations but it has been rarely applied to sub national systems its calculation at the local level is important especially in case of administrative decentralization and autonomy and responsibility of local authorities in certain fields for this reason a more and more comprehensive knowledge of the characteristics and peculiarities of the territorial system they manage is necessary this paper presents the results of the isew calculation for tuscany a region in central italy in the period 1971 2006 this is one of the few attempts to apply the isew in time series at the regional level final results show that a discrepancy between isew and gdp appeared in the 1970s social and environmental pressures increased during the period under study making the gap equal to about 30 percent of regional gdp in 2006 the isew can be used also as a tool for evaluating policies but further adjustments in calculation of certain items are considered necessary for taking into account and evaluating punctual policies a case of energy policy is presented

the political economy of financial reform are abiad and mody right motivated by the questions financial reform what shakes it what shapes it raised by abiad and mody 2005 this paper studies the forces that induce governments to undertake financial sector reform rather than their ordered logit technique it uses a within groups approach allowing for error dependence across countries and over time this analysis shows that some of the am findings are not robust to error dependence and the estimation method it has shed new light on the political economy of financial reform copyright 2009 john wiley sons ltd

productivity and efficiency at large and community banks in the us a bayesian true random effects stochastic distance frontier analysis this paper compares the productivity and efficiency of large banks and community banks in the united states over the period 1997 2006 this comparison is performed by estimating a true random effects stochastic distance frontier model a model that is capable of disentangling unobserved heterogeneity from inefficiency within a bayesian framework we find that failure to consider unobserved heterogeneity results in a misleading ranking of banks and mismeasured technical efficiency productivity growth and returns to scale our results show that compared with community banks large banks have experienced much higher productivity growth and higher levels of returns to scale our estimates of total factor productivity growth show a clear downward trend for both large and community banks and our decomposition of the output distance function based divisia productivity index indicates that technical change is the driving force behind this trend

tax smoothing and the cross country pattern of privatization summary privatization generally enhances firm level efficiency the impact of privatization on fiscal efficiency has however been overlooked using the tax smoothing ideas articulated by r barro 1979 on the determination of the public debt journal of political economy 87 940 971 and by h bohn 1990 tax smoothing with financial instruments american economic review 80 1217 1230 we argue that privatization may have an important impact on the welfare losses associated with tax collection this impact can either enhance or erode the efficiency of taxation we hypothesize that countries that benefit in terms of fiscal efficiency will privatize aggressively while countries that enjoy fiscal benefits as a result of state ownership will show little interest in privatization statistical tests are conducted that provide considerable support for the hypothesis

management ownership and market valuation an empirical analysis we investigate the relationship between management ownership and market valuation of the firm as measured by tobin s q in a 1980 cross section of 371 fortune 500 firms we find evidence of a significant nonmonotonic relationship tobin s q first increases then declines and finally rises slightly as ownership by the board of directors rises for older firms there is evidence that q is lower when the firm is run by a member of the founding family than when it is run by an officer unrelated to the founder

the index of sustainable economic welfare isew for a local authority a case study in italy abstract the index of sustainable economic welfare isew has been calculated for many countries but rarely at the local level this paper shows how the index has been calculated for the province of siena central italy the whole procedure is illustrated step by step including the search for the most suitable and precise methods to obtain reliable values for each item composing the index application of isew at a very local level was found to be feasible the most general difficulty encountered was the lack of an adequate institutionalised source of statistical information to support the construction of indicators other than purely economic or demographic ones this is mainly due to the still low interest for a sustainable management of natural resources and land on the part of local authorities and the related willingness to invest money and human resources on environmental research the isew gives a more realistic representation of the well being of the population than gdp since it includes environmental and social items not considered in conventional national accounting furthermore in italy the principle of administrative decentralization has been implemented in recent years to such an extent that the central government devolved part of its power to regions provinces and municipalities consequently local authorities are called to allocate more resources to pursue their policies towards sustainability an issue which modern electoral campaigns are often based on the results for the province of siena show that there is a large gap between local gdp and isew about 37 of gdp

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

accounting for the utilisation of geothermal energy resources within the genuine progress indicator a methodological review abstract the genuine progress indicator gpi was initiated to mainly reflect strong rather than weak sustainability principles and embrace a fisherian understanding of income and capital prior to this review neither existing calculation methodologies nor academic reviews of the gpi had considered the possibility that geothermal energy resources might not deliver sustainable yields although geothermal energy is renewable in the sense of the earth s almost ubiquitous capacity to store heat the resources are frequently utilised at a rate that is unsustainable pressure recovery and fluid heat recharge periods typically endure for several decades or more whenever geothermal resources are utilised unsustainably this paper contends that the gpi should deduct monetary costs for the excess depletion this approach would maintain the gpi s methodological correctness as a measure of sustainable economic welfare in current time terms failure to do so is affirmative of the weak sustainability paradigm inferring that overexploited energy resources can be either fully replaced or partially substituted when their yields begin to diminish this paper sets out a new method for calculating gpi cost deductions for the unsustainable utilisation of geothermal energy resources the outlined approach synthesises existing academic theory concerning geothermal production modes and levelised energy cost calculations

the contribution of product mix versus efficiency and technical change in us banking abstract similar to a du pont analysis this paper divides the changes in returns on assets of us commercial banks for the period from 2000 to 2005 into conventional measures of bank performance the contribution of product mix is significant and offsets losses from technical change and operating efficiency banks respond to changes in the business environment by switching towards more lucrative traditional and nontraditional products large banks are found to benefit more than community banks from the switch to an optimal output portfolio mix including new products spawned by recent financial innovations and deregulation

measuring sustainable welfare a new approach to the isew abstract sustainability and welfare assessment is a contemporary theme of major scientific and policy relevance requiring the consideration of multiple dimensions and diverse perspectives the economic approach to sustainability and welfare assessment has frequently relied on alternatives or adjustments to gdp widely used as an indicator of macroeconomic performance several authors have proposed alternative indicators such as the isew which intend to measure sustainability and economic welfare in a way that avoids the limitations of gdp namely accounting for the value of externalities the distribution of income and natural resources depletion since daly and cobb 1989 there have been proposed improvements to the isew however its aptitude to represent a sound alternative to gdp is still the subject of scientific debate this paper presents a new approach to the isew named modified isew including new components and methodological changes for the estimation of the index these have the purpose of avoiding some of the index shortcomings and allow for a direct comparison with the gdp which are advantages over previous studies an application is developed for the us case taking advantage of wide data availability and the possibility of comparing the results with previous works the results obtained provide a clearer picture of the success or failure of environmental and social policies namely by avoiding the tampering effect resulting from the cumulative accounting of environmental externalities this work also emphasizes the inadequacy of gdp as a welfare indicator as well as the need to develop and adopt alternative indicators

determinants of the allocative cost and scope efficiencies of indian banks this study aims to investigate the impact of competition on determinants of allocative scope and cost efficiencies of indian scheduled commercial banks scbs specifically the study analyzes th

barriers and opportunities for alternative measures of economic welfare this paper explores a number of barriers and opportunities facing alternative measures of economic welfare by conducting semi structured in depth interviews with potential users in both belgium and germany the barriers that they identified are grouped into three categories context factors are embedded in the policy context and agendas that shape the environment in which an indicator percolates indicator factors depend on specific characteristics of the indicators while user factors relate to the level of experience and expertise of the users of indicators and the institutional culture in which they operate drawing on the different barriers that are reported we identify four opportunities to increase the policy value of alternative measures of economic welfare harmonizing and updating the methodological framework extending macroeconomic models to include a wider range of welfare related items improving the communication around these indicators and promoting indicator and researcher entrepreneurship these opportunities should be regarded as recommendations to the scientific community that works on these alternative measures the process of overcoming the different barriers listed in this paper should not be insurmountable as there is clear international public support for using health social and environmental statistics as well as economic statistics to measure societal progress and human well being

calculation of fair wage potentials along products life cycle introduction of a new midpoint impact category for social life cycle assessment abstract income and wages are among the determinant factors for the living standards and well being of workers and thus carry a certain degree of relevance for social life cycle assessment slca although fair wages have often been mentioned as a quantitative measure of societal well being a defined impact category and quantitative characterization model is missing against this background this paper aims at defining fair wage as a new midpoint impact category for slca and suggests a characterization model to calculate fair wage potentials fwps along a product s life cycle the characterization model considers the actual wage paid at each process step in comparison to a minimum living wage it furthermore relates wage to the effective working time and includes an inequality factor to account for income inequalities the characterization model was tested in a cradle to gate case study on tomatoes produced in germany to ensure its applicability results indicate potentially negative social impacts for workers employed in packaging and transport in turkey and workers in manufacturing and packaging in china in contrast low impacts resulted for the indian workers no negative impacts are expected for the german and dutch workers the midpoint category fair wage and the associated characterization model facilitate the operationalization of social impact assessment and provide companies with a practical method to quantify and evaluate their products life cycle

bank size and macroeconomic shock transmission does the credit channel operate through large or small banks in this paper i use u s call report data to construct a larger panel dataset with bank level observations i find that larger banks lending is considerably more sensitive to the strength of their borrowers and their own balance sheets compared to smaller banks and that the sensitivities to borrower balance sheets are larger in magnitude compared to lender balance sheets when i incorporate various macroeconomic shocks identified by an estimated dsge model into the empirical model i similarly find that the transmission of shocks to the real economy operates mostly through large bank lending and borrower balance sheets

crisis in the eye of the beholder economic crisis and partisan politics in latin american and east european international monetary fund programs this article analyzes the interaction between economic crises and partisan politics during international monetary fund program initiation in latin america in the 1980s and eastern europe in the 1990s the author argues that economic crises are at least in part in the eye of the beholder and therefore policy responses reflect the interaction between crisis intensity and the government s partisan interpretation of the crisis which in turn depends on the nature of the economic crisis and its broader regional and international environment using cross country statistical evidence from the two regions the article shows that certain types of crises such as liquidity shortfalls elicit similar responses across the ideological spectrum and regional contexts by contrast debt repayment and domestic crises are more prone to divergent ideological interpretations but the extent of partisan divergence is context sensitive in that it occurred during the latin american debt crisis but not in the post communist tra

leviathan resists the endogenous relationship between privatization and firm performance using a panel dataset of privatized cement firms in turkey this paper models and finds support for the simultaneous relationship between privatization and firm performance it is found that favorable short run performance weak market potential higher employment lower socio economic development concentrated voter preferences and weaker representation of right wing parties in the firms locality delay the timing of privatization the paper also finds that privatization increases output in the medium term by reducing the labor stock and promoting the adoption of more advanced technology such that production shifts from constant to decreasing returns to scale

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

a theoretical foundation to support the index of sustainable economic welfare isew genuine progress indicator gpi and other related indexes abstract for some time now ecological economists have been putting forward a threshold hypothesis the notion that when macroeconomic systems expand beyond a certain size the additional cost of growth exceeds the flow of additional benefits in order to support their belief ecological economists have developed a number of similar indexes to measure and compare the benefits and costs of growth e g the index of sustainable economic welfare isew and the genuine progress indicator gpi in virtually every instance where an index of this type has been calculated for a particular country the movement of the index appears to reinforce the existence of the threshold hypothesis of late a number of observers have cast doubt over the validity of these alternative indexes one of the concerns commonly expressed is the supposed lack of a theoretical foundation to support the isew the gpi and other related indexes by adopting a concept of income and capital outlined by fisher nature of capital and income a m kelly new york 1906 this paper demonstrates that these alternative indexes are theoretically sound but in order to be broadly accepted require the continuous development of more robust valuation methods

returns to scale at large banks in the us a random coefficient stochastic frontier approach abstract this paper investigates the returns to scale of large banks in the us over the period 1997 2010 this investigation is performed by estimating a random coefficient stochastic distance frontier model in the spirit of tsionas 2002 and greene 2005 2008 the primary advantage of this model is that its coefficients can vary across banks thereby allowing for unobserved technology heterogeneity among large banks in the us we find that failure to consider unobserved technology heterogeneity results in a misleading ranking of banks and mismeasured returns to scale our results show that the majority of large banks in the us exhibit constant returns to scale in addition our results suggest that banks of the same size can have different levels of returns to scale and there is no clear pattern among large banks in the us concerning the relationship between asset size and returns to scale due to the presence of technology heterogeneity

imposing inequality restrictions efficiency gains from economic theory abstract econometricians may feel that imposing inequality restrictions improves statistical efficiency but no real empirical evidence exists the results of a monte carlo experiment show that imposing the curvature conditions on a system of demand equations improves the mses on estimated elasticities from 3 to 50 depending on the signal to noise ratio and the sample size

why are stabilizations delayed when a stabilization has significant distributional implications e g tax increases to eliminate a large budget deficit socioeconomic groups may attempt to shift the burden of stabilization onto other groups the process leading to stabilization becomes a war of attrition each group attempting to wait the others out and stabilization occurring only when one group concedes and bears a disproportionate share of the burden the authors solve for the expected time of stabilization in a model of rational delay and relate it to several political and economic variables they motivate this approach and its results by comparison to historical and current episodes copyright 1991 by american economic association

airline deregulation the cost pieces of the puzzle this paper analyzes cost changes in the u s airline industry in the pre and postderegulation era using a panel data set of airlines specifically it seeks to disentangle cost changes attributable to technical change economies of scale and density and input prices the authors estimate a purely general index of industry technical change and in turn analyze its determinants despite the slowing of productivity growth in the 1980s deregulation does appear to have stimulated technical change due to more efficient route structures copyright 1995 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

the effects of privatization on efficiency how does privatization work summary uncovering the effects of privatization is difficult because privatization of a particular firm usually is not an accident this paper tests the effects of privatization on productive and allocative market efficiency using a rich panel data set of 22 privatized cement plants from turkey in the 1983 99 period since all public cement firms were privatized and we have pre and post privatization data for all we are able to avoid the problem of endogeneity associated with sample selection our analysis goes beyond just examining the privatization effects and explores how privatization really works changes in objectives of the firm ownership effect and changes in market structure environment effect may both be responsible for privatization outcomes we find that ownership effects are sufficient to achieve improvements in labor productivity our results on allocative efficiency however are dependent on changes in the competitive environment while all plants seem to improve labor productivity through work force reductions plants privatized to foreign buyers also increase their capital and investment significantly

european vs u s airlines performance comparison in a dynamic market abstract this study measures and compares the efficiency and productivity of european and u s airlines over the period from 2001 to 2008 we measure efficiency by estimating a bayesian distance frontier model subject to regularity constraints productivity estimates are also derived parametrically based on the estimates of the distance frontier model we estimate both a constrained i e subject to regularity conditions and an unconstrained model and we show the importance of imposing the monotonicity and curvature conditions on the distance function the efficiency and productivity results based on the constrained model indicate that european airlines have slightly higher efficiency and productivity growth than u s airlines a comparison based on the type of airlines indicates that low cost airlines are on average more productive and efficient than full service airlines the decomposition of productivity growth and related market discussions are also provided

do large banks have lower costs new estimates of returns to scale for u s banks this paper presents new fully nonparametric estimates of ray scale and expansion path scale economies for u s banks based on a model of bank costs unlike prior studies that use models with restrictive parametric assumptions or limited samples our methodology uses local polynomial estimators and data on all u s banks over the period 1984 2006 our estimates indicate that as recently as 2006 most u s banks faced increasing returns to scale suggesting that scale economies are a plausible but not necessarily only reason for the growth in average bank size and that the tendency toward increasing scale is likely to continue unless checked by government intervention

has australia surpassed its optimal macroeconomic scale finding out with the aid of benefit and cost accounts and a sustainable net benefit index abstract the sustainable economic welfare of a nation depends largely on the sustainable net benefits the macroeconomy confers to its citizens for this reason an optimal macroeconomic scale can be considered one where the physical scale of the macroeconomy and the qualitative nature of the stock of wealth it comprises maximises a nation s sustainable net benefits the corollary of this definition is thus the physical scale of the macroeconomy should grow only if in the process the sustainable net benefits of a nation increase it should cease to grow once sustainable net benefits are maximised whilst it is one thing to promote an optimal macroeconomic scale it is another entirely to gain an appreciation of the sustainable net benefits yielded by the macroeconomy gaining such an appreciation constitutes the central aim of this paper with the assistance of two separate benefit and cost accounts to replace gross domestic product gdp a sustainable net benefit index is constructed for australia for the period 1966 1967 to 1994 1995 the index particularly at the per capita level indicates that economic welfare in australia is declining i e the average australian is getting poorer despite per capita real gdp increasing the index therefore suggests that the scale of the australian macroeconomy has probably well exceeded the optimum

industrial policy choice during the crisis era using an extensive database of non macroeconomic state interventions implemented since the global economic crisis began this paper provides quantitative evidence on the resort to selectivity by several major economic powers the propensity to promote certain sectors certain firms within sectors and domestic over commercial interests is contrasted across jurisdictions at least one prominent contention in the industrial policy literature is not borne out in the data and certain cross country and cross sectoral variations found here could benefit from further analysis a crisis era shift towards selectivity and away from the level playing field can be detected in the major trading nations

productivity growth in canadian telecommunications canadian telecommunications firms do not price proportionately to marginal cost the prices of toll services tend to be above marginal costs whereas the prices of basic local services are typically set below marginal costs by regulators in such circumstances estimates of tfp growth using the conventional tornqvist divisia formula which weights outputs by revenue shares in determining the rate of growth of aggregate output is theoretically incorrect and needs to be replaced by a formula which uses cost elasticity weights empirically the conventional tornqvist index yields a very distorted picture of efficiency gains in the two largest canadian telephone companies during the 1980s for bell canada i calculate the upward bias to be approximately 75 percent over the period 1980 89 and 80 percent over the period 1985 89 for b c tel a similar calculation yields an upward bias of 37 percent over the period 1980 89 and 48 percent over the period 1985 89

bank competition efficiency in europe a frontier approach abstract there are numerous ways to indicate the degree of banking competition across countries antitrust authorities rely on the structure conduct performance paradigm while academics prefer price mark ups lerner index or correlations of input costs with output prices h statistic these measures are not always strongly correlated within or across countries frontier efficiency analysis is used to devise an alternative indicator of competition and rank european countries by their dispersion from a competition frontier the frontier is determined by how well payment and other costs explain variations in loan deposit rate spread and non interest activity revenues overall differences in competition appear to be small

bot projects incentives and efficiency abstract in recent years governments have been increasingly adopting build operate transfer bot contracts for large infrastructure projects however bot contracts have received little attention from economists the apparent agency problem in bot projects has never been analyzed in this paper we develop a model to examine the incentives efficiency and regulation in bot contracts we show that a bot contract with a price regulation during the concession period and a license extension after the concession period is capable of achieving full efficiency both license extension and price control are observed in many real world bot projects we also investigate the efficiency in such contracts by considering other factors including time consistency price ceiling foreign ownership and the lack of price regulation

managers and efficiency in banking abstract this paper presents evidence on the impact of managers on cost efficiency in banking stochastic frontier analysis is applied to a unique finnish data set manager age and education have strong yet complicated effects on efficiency the impact of age on efficiency depends on education a university degree is useful mainly in the largest banks of the sample educational background seems to be less important for young managers than for mature ones managing director changes are systematically followed by efficiency changes retirement typically causes an efficiency improvement whereas other manager changes can either improve or weaken efficiency however in many cases mature managers outperform their young colleagues

the educational and professional background of central bankers and its effect on inflation an empirical analysis we assume that central banks can control inflation so that inflation rates reflect the preferences of the central bank council the hypothesis to be tested is that these preferences depend on the central bankers educational and or professional background in a panel data analysis for the euro area and eleven countries since 1973 we explain inflation either by the weights with which the educational and professional characteristics of the 391 council members were represented in the various central bank councils or by the education or profession of the median council members control variables are added using professional background weights we find that former members of the central bank staff and in some specifications former insurance executives commercial bankers other businessmen and public servants prefer significantly lower inflation rates than former union leaders and politicians do in the median voter analysis former central bankers commercial bankers businessmen and public servants are also significantly more inflation averse than economic scholars as for the education of the council members our results are less robust however if the median member of the central bank council has studied business the inflation rate is significantly lower than if she has studied economics taking educational and professional background together central banks seem to attract or produce primarily economists who are monetary conservatives whereas keynesian economists are more prominent in academia jel classification e42 e58

behavior of the firm under regulatory constraint a recent article by akira takayama discusses an earlier paper by harvey averch and leland l johnson on fair rate of return regulation of public utilities although takayama p 255 agrees with averch and johnson s general conclusions that a firm will tend to increase its investment with the introduction of an active constraint on its rate of return he criticizes the a j argument as being confusing ambiguous and in error takayama then attempts a clarification and presents a new formulation which leads to the a j result quoted above this comment will discuss several of takayama s criticisms in addition to showing that the so called a j effect cannot be derived from the basic assumptions made by both averch and johnson and takayama 1 we will show that the very assumptions used to prove the a j effect by defining the region of x require an assumption that the a j effect exists in the first place

the benefit of crises for economic reforms when expenditures consistently outrun revenue the resulting inflation may have the effect of convincing the public and government that taxes must be raised to finance public investment in the advanced industrial countries income taxation and big spurts in taxation generally have become possible only under the impact of major emergency and crisis mostly in wartime in a number of developing countries in

why and when do governments initiate public enterprise reform initiating public enterprise reform is a complex decision influenced by economic factors as well as the ideological biases and personalities of political leaders nevertheless the use of a contracting framework yields important generalizations about what drives the decision this article argues that the decision depends fundamentally on the potential efficiency gains from the reform and its associated transactions costs costs arise because of asymmetries in information and opportunism problems that usually plague contract negotiations the article identifies observable variables that may affect either the potential gains or the transactions costs uses them to construct a simple probit decision making model and tests the model using data from fifteen developing countries over a twenty year period

australia s genuine progress indicator revisited 1962 2013 abstract the genuine progress indicator gpi has been proposed as an alternative to gdp as an indicator of national progress gpi includes 26 components that adjust gdp for inequality include household and volunteer work and subtract a number of social and environmental costs best seen as negatives the gpi has been estimated for over 20 countries and many states and territories this paper updates australia s gpi to determine whether australia as a nation has progressed overall since the 1960s and compares two alternative approaches that differ in some important details we find that despite these differing approaches we find that gpi remained largely stagnant from the 1960s through to the 1990s and only at the turn of the century has gpi started to increase despite increasing negative environmental costs while gpi is well placed to serve as an improved australian and global measure of national progress further work is needed to measure national well being and support its integration into political decision making and to include the full range of subjective and objective indicators ultimately this paper argues that while gpi is well placed to serve as a new australian and global measure of well being we stress the need for an alternative indicator like gpi to supplement gdp and to better inform policy decisions

profiting from government stakes in a command economy evidence from chinese asset sales abstract we examine the market response to an unexpected announcement of the sale of government owned shares in china in contrast to earlier work we find a negative effect of government ownership on returns at the announcement date and a symmetric positive effect from the policy s cancellation we suggest that this results from the absence of a chinese political transition to accompany economic reforms so that the benefits of political ties outweigh the efficiency costs of government shareholdings companies managed by former government officials have positive abnormal returns suggesting that personal ties can substitute for government ownership as a source of connections

economies of diversification in the us credit union sector summary significant scale economies have been recently cited to rationalize a dramatic growth in the us retail credit union sector over the past few decades in this paper we explore another plausible supply side explanation for the growth of the industry namely economies of diversification we focus on the fact that credit unions differ among themselves in the range of financial services they offer to their members since larger credit unions tend to offer a more diversified financial service menu than credit unions of a smaller size the incentive to grow in size may be fueled not only by present scale economies but also by economies of diversification this paper provides the first robust estimates of such economies of diversification for the credit union sector we estimate a flexible semiparametric smooth coefficient quantile panel data model with correlated effects that is capable of accommodating a four way heterogeneity among credit unions our results indicate the presence of non negligible economies of diversification in the industry we find that as many as 27 91 depending on the type and the cost quantile of diversified credit unions enjoy substantial economies of diversification the cost of most remaining credit unions is invariant to the scope of services we also find overwhelming evidence of increasing returns to scale in the industry

long live democracy the determinants of political instability in latin america abstract we investigate the underlying causes of political instability in a panel of 18 latin american countries from 1971 2000 we test whether regime type regime durability factionalism income inequality ethnic diversity ethnic discrimination regional spillover effects urban growth and macroeconomic variables matter for instability we find several important results 1 democracy has a significant negative effect on instability that is robust to several alternative specifications 2 factionalised political systems experience higher instability 3 income inequality ethnic fractionalisation and urban growth have important nonlinear effects on instability and 4 of the macroeconomic variables we study only openness to trade has a significant negative effect on instability

efficiency and productivity growth in the banking industry of central and eastern europe abstract we employ the directional technology distance function and provide estimates of bank efficiency and productivity change across central and eastern european cee countries and across banks with different ownership status for the period 1998 2003 our results demonstrate the strong links of competition and concentration with bank efficiency they also show that productivity for the whole region initially declined but has improved more recently with further progress on institutional and structural reforms input biased technical change has been consistently positive throughout the entire period suggesting that the reforms have induced favorable changes in relative input prices and input mix however we find evidence of diverging trends in productivity growth patterns across banking industries and that foreign banks outperform domestic private and state owned banks both in terms of efficiency and productivity gains overall we find that productivity change in cee is driven by technological change rather than efficiency change

when do governments improve fiscal institutions lessons from financial crisis and fiscal reform in latin america do crises really lead to more institutional reforms this paper explores the connection between financial crises and one type of reform frequently advocated during the recent global financial crisis namely fiscal institutional reforms some authors expect that crises lead to reforms but we demonstrate that the relationship is not so straightforward using a data set of latin american countries that experienced several crises and also several periods of reform in the period from 1990 to 2005 we find that the type of crisis and its duration matter we argue that reforms are less likely during a banking crisis whereas fiscal crises are most likely to lead to fiscal reforms this means that the type of economic crisis is important for explaining the likelihood of reforms we explore other possible explanations for reform such as the partisanship of the president and whether a country is under an imf program and do not find confirming evidence for alternative explanations

the political economy of financial reform how robust are huang s findings using new data on financial liberalization taken from abiad et al 2008 imf working papers no 08 266 for 62 countries over the period 1975 2005 we show that some of the main findings of huang s 2009 journal of applied econometrics 24 1207 1213 replication study on the drivers of financial liberalization are not robust major changes concern the effect of democracy on financial reform and the supposed relationship between the desired level of financial liberalization and a country s per capita income copyright c 2012 john wiley sons ltd

why do crises go to waste fiscal austerity and public service reform in the tight budgetary conditions following the 2008 financial crisis governments have proposed saving money by reforming public services this paper argues that tight budget constraints make reform harder by introducing an information problem governments are uncertain about bureaucratic departments effectiveness normally effective departments can be identified by increasing their budget since they can use the increase to produce more than ineffective departments can when budgets must be cut however ineffective departments can mimic effective ones by reducing their output budget cuts thus harm both short run productive efficiency and long run allocative efficiency i confirm these predictions in a us dataset low marginal productivity bureaucracies reduce output by more than expected in response to a budget cut and budget setters respond less to observed short run marginal productivity after cutback years

intergenerational trade longevity and economic growth we develop an overlapping generations model of endogenous growth in which human capital is the engine of growth and the generations are linked through material and emotional interdependencies within the family parents invest in their children to achieve both old age support care and emotional gratification and material support from children is determined through self enforcing implicit contracts we show that optimal intergenerational trade can then lead to maximization of growth opportunities our model produces a theory of the demographic transition linking longevity fertility and economic growth we also show that while population aging may raise the growth rate an increase in young age longevity is likely to produce a greater increase in the growth rate and a reduction in the fertility rate in a growth equilibrium these predictions and the model s implications concerning the behavior of private savings during the takeoff period appear consistent with empirical evidence

measuring and decomposing productivity change measuring productivity change with malmquist indices has become common practice because they are easily computed using nonparametric programming techniques and can be readily decomposed into technical and efficiency change however this approach is nonstochastic and requires a constant returns to scale assumption to construct the reference technology we propose estimating productivity change using a stochastic input distance frontier imposing no restrictions on returns to scale we derive the analogous decomposition of productivity change and develop a generalized method of moments strategy in which outputs or inputs may be endogenous we compare two methods in an application to electric utilities

beyond gdp measuring and achieving global genuine progress article i nfo while global gross domestic product gdp has increased more than three fold since 1950 economic wel fare as estimated by the genuine progress indicator gpi has actually decreased since 1978 we synthesized estimates of gpi over the 1950 2003 time period for 17 countries for which gpi has been estimated these 17 countries contain 53 of the global population and 59 of the global gdp we compared gpi with gross domestic product gdp human development index hdi ecological footprint biocapacity gini coefficient and life satisfaction scores results show a significant variation among these countries but some major trends we also estimated a global gpi capita over the 1950 2003 period global gpi capita peaked in 1978 about the same time that global ecological footprint exceeded global biocapacity life satisfaction in almost all countries has also not improved significantly since 1975 globally gpi capita does not increase beyond a gdp capita of around 7000 capita if we distributed income more equitably around the planet the current world gdp 67 trillion yr could support 9 6 billion people at 7000 capita while gpi is not the perfect economic welfare indicator it is a far better approximation than gdp development policies need to shift to better account for real welfare and not merely gdp growth

measuring banks market power in the presence of economies of scale a scale corrected lerner index abstract a positive lerner index indicates a welfare loss for consumers due to deviations from marginal cost pricing such a welfare loss may not always be due to market power though in particular marginal cost pricing would result in negative profit for the firm in the presence of economies of scale in such a scenario a positive lerner index could simply reflect the firm s need to earn non negative profits rather than market power we propose a novel scale corrected price cost margin for firms that produce in the economies of scale range we show that this measure is more informative about market power than the lerner index itself as an empirical illustration we analyze market power in the u s banking sector using both the corrected and uncorrected lerner index the corrected lerner index reveals significant market power for u s commercial banks during the 2000 2014 period

qualitative and mixed methods research in economics surprising growth promising future qualitative research in economics has traditionally been unimportant compared to quantitative work yet there has been a small explosion in use of quantitative approaches in the past 10 15 years including mixed methods projects which use qualitative and quantitative methods in combination this paper surveys the growing use of qualitative methods in economics and closely related fields aiming to provide economists with a useful roadmap through major sets of qualitative methods and how and why they are used we review the growing body of economic research using qualitative approaches emphasizing the gains from using qualitative or mixed methods over traditional closed ended approaches it is argued that although qualitative methods are often portrayed as less reliable less accurate less powerful and or less credible than quantitative methods in fact the two sets of methods have their own strengths and how much can be learned from one type of method or the other depends on specific issues that arise in studying the topic of interest the central message of the paper is that well done qualitative work can provide scientifically valuable and intellectually helpful ways of adding to the stock of economic knowledge especially when applied to research questions for which they are well suited

diagram for a small planet the production and ecosystem possibilities curve abstract with the development of the gpi there is now an ecological alternative to gdp for measuring a country s economic performance but we still lack an ecological alternative to the ppc for illustrating a country s economic problem the diagram suggested here illustrates a country s production and ecosystem possibilities including climate stability flood control carbon sequestration aquifer recharge scenery recreation biological diversity and so on burning a rainforest to clear the land shifts a country s ppc outward giving the visual impression of an unmitigated improvement but such development causes a movement along the country s pepc as ecosystem services are transformed into gdp the slope of the pepc is the marginal rate of transformation which equals the ratio of the land s marginal marketable product to its marginal ecosystem product changes in technology create substitution and income effects that help explain the enclosure movement and the environmental kuznets curve much as employment of the human resource can be restrained to allow more leisure development of the natural resource can be restrained to preserve more ecosystem services commercial lobbying interests and rivalries for positional goods create distortions that move a country along its pepc to a materialistic misallocation with too little conservation an idealistic misallocation is also possible with too much preservation of the natural environment small is beautiful up to a point and that is evident in this diagram jacob viner s viner j 1937 studies in the theory of international trade harper and brothers new york analytical objections to the ppc are revived

how did bank holding companies prosper in the 1990s abstract this paper examines the improved performance of us bank holding companies bhcs from 1991 to 1997 analysis of cost and profit functions using several alternative output specifications suggests that the gains were primarily due to productivity growth and changes in scale economies various econometric methodologies yield productivity growth of about 0 4 per year and the optimal size seems to have increased in the 1990s era of deregulation technological change and financial innovation estimates of both productivity growth and economies of scale are robust across traditional and non traditional output specifications despite the overall success however substantial cost and profit inefficiency existed for bhcs of all sizes in the 1990s these efficiency estimates are particularly sensitive to the output specification and failure to account for non traditional activities like off balance sheet obs items leads profit efficiency but not cost efficiency to be understated for the largest bhcs

improving police services evidence from the french quarter task force abstract this study sheds light on the improvement of police services by examining the french quarter task force fqtf an anti crime program in new orleans french quarter first we provide new evidence that increasing police presence is effective in crime prevention our difference in differences estimates suggest that the fqtf which increased police visibility in the french quarter reduced robberies aggravated assaults and thefts by 37 4 16 9 and 13 respectively second our findings imply that the proper use of monitoring and incentive strategies has the potential to further improve police services exploiting the program s change in management we find that providing officers with more monitoring and performance incentives led the fqtf to reduce robberies by 22 12 and aggravated assaults by 5 56 each quarter

inflation s children tales of crises that beget reforms are broad reforms the children of high inflation do growth recoveries follow we find that countries that had external debt crises with high inflation both reformed more and recovered better than countries that had external debt crises with low inflation countries with extremely high inflation also later wound up with lower inflation than countries that has moderately high inflation the low inflation debtor countries had more aid than the high inflation debtor countries which may have created stronger incentives to reform in the high inflation countries recent reforms look like they are the children of high inflation even if further paternity tests are in order this abstract was borrowed from another version of this item

estimates of the genuine progress indicator gpi for oregon from 1960 2010 and recommendations for a comprehensive shareholder s report abstract the genuine progress indicator gpi is a significantly more comprehensive approach to assessing economic progress than conventional measures such as gross domestic product gdp we estimated the gpi for the state of oregon from 1960 2010 we found that it tracked the gross state product gsp for the period 1970 2000 but began to diverge and flatten out in 2000 the major reasons for this divergence were increasing inequality loss of farmland and decreasing personal consumption expenditures as a fraction of gsp oregon gpi per capita leveled off in 2000 while the us gpi capita leveled off in 1975 the gpi is not the perfect indicator of economic and social well being but it is a better approximation than gdp as more states and countries begin to recognize the inappropriateness of gdp as a policy goal we can expect to see much more emphasis on and use of alternative indicators like gpi we recommend extending these indicators to include a comprehensive shareholder s report that reflects all the state s capital assets including built human social and natural capital

do crises induce reform a critical review of conception methodology and empirical evidence of the crisis hypothesis the notion that economic crises induce the adoption of reform ranks among the most widely accepted concepts in the political economics literature however the underlying mechanism of the so called crisis hypothesis has yet to be fully understood this paper provides a comprehensive survey of the relevant empirical evidence to date and scrutinizes the operationalization of the hypothesis key concepts crisis reform and the political mediation of reform during crises we argue that the social perception of both crises and the subsequent cost of reform requires consideration of how these concepts are operationalized as a product of the broader economic and institutional environment social perceptions largely determine the manner in which the political mediation of reform during crises works present day methodological approaches fail to adequately reflect social perceptions and consequently compromise the determination of what constitutes both crisis and the cost of reform in the context of the crisis hypothesis most notably the identification of crises by fixed thresholds constructed around macroeconomic variables impedes the interpretation of the hypothesis underlying mechanism a fuller treatment of social perception within the operationalization of the hypothesis key concepts can enhance our understanding of how economic crises influence political dynamics in bringing about reform

parametric decomposition of output growth using a stochastic input distance function midmore peter karagiannis g tzouvelekas v parametric decomposition of output growth using a stochastic input distance function american journal of agricultural economics 2004 86 4 pp 1044 1057

a summary of isew and gpi studies at multiple scales and new estimates for baltimore city baltimore county and the state of maryland this paper 1 summarizes a number of previous index of sustainable economic welfare isew and genuine progress indicator gpi studies at various scales 2 estimates the gpi for baltimore baltimore county and the state of maryland and 3 compares these results with previous and parallel studies gpi incorporates environmental social and economic information into a single metric to represent economic well being at all three scales gpi was found to grow at a slower rate than the conventional economic measure of gross domestic product gdp while at the us national scale gpi has been relatively flat since 1975 state level results match an independently calculated maryland gpi confirming that gpi methods are robust and reproducible in addition the state of maryland has recently made gpi one of their official state statistics reported annually state level gpi results were also compared with studies for the states of ohio and vermont to explore regional differences we recommend that the gpi research community develop consensus on a standardized measurement approach and seek common ground for advancing the use of improved indicators and accounting systems in official policy settings

economic growth quality environmental sustainability and social welfare in china provincial assessment based on genuine progress indicator gpi abstract in order to devise scientific and sustainable development strategy it is vital to assess the quality of economic growth as a useful complement to traditional economic indicators gpi s most reputed virtue is its great improvement in evaluating environmental and social costs in this paper we estimate the gpi for all 31 provinces in mainland china from 1997 to 2016 gpi estimation is highly sensitive to income inequality climate change damage and depletion of non renewables we address contestable methodological assumptions associated with the three items which have been usually ignored in empirical studies we use the atkinson index in place of the gini index as a measure of income inequality we avoid the problematic duplicated counting of climate change damage and the unjustified cost escalation factor in depletion of non renewables our results show that first gpi per capita has recently declined in some provinces unveiling a threat to social welfare and sustainability second the relative threshold effect the progress of social welfare promotion is slower than the expansion of economic scale has been found in many provinces third resource consumption and environmental pollution especially water pollution and carbon emissions would generate substantial welfare losses

politics and productivity i introduction economic studies of long run performance are focusing increasingly on political legal financial and social factors development is no longer regarded as a gradual inevitable transformation from self sufficiency to specialization and participation in the division of labor instead progress follows the creation and evolution of institutions that support social and commercial relationships the new institutional economics explains that growth requires that the potential hazards of trade shirking opportunism risk and so on be controlled by institutions like secure property rights reliable procedures for resolving disputes and means of enforcing contracts in the absence of close social ties these institutions reduce information costs encourage capital formation and capital mobility allow risks to be priced and shared and otherwise facilitate cooperation north and thomas 1973 north 1990 drobak and nye 1997 levine 1997 in particular political authorities must make credible commitments not to expropriate private resources once investments have been made 1 despite widespread agreement that institutions matter there is no consensus on how they should be incorporated into the analysis even the best empirical studies of productivity and growth treat institutional characteristics in an eclectic way barro s 1991 influential article for example uses the numbers of assassinations and revolutions per capita as proxies for political instability finding these measures negatively correlated with growth and investment scully 1988 regresses growth rates on dummy variables derived from gastil s 1982 ordinal rankings of political and economic liberty king and levine 1993a 1993b 1993c derive various measures of the quality of financial intermediaries and show that these measures are good predictors of growth this article presents a different approach to analyzing the relationship between institutions and aggregate economic performance following the modem productivity literature see for example fried et al 1993 we model economic performance with a stochastic production frontier frontier analysis is a form of benchmarking it analyzes a group of branches firms nations or other units by identifying best practices and evaluating each member s performance relative to the best practice frontier the results produce not only qualitative rankings of the group members but also numerical efficiency scores that can be used to assess the effects of various policies and characteristics for this reason frontier analysis is well suited for studying the effects of legal and political institutions on the economic performance of nations to capture institutional factors we use two comprehensive indexes of legal regulatory and political conditions working with a broad sample of countries from 1975 to 1990 we incorporate a widely used measure of economic freedom along with a new measure of policy stability to represent a country s institutional environment the new institutional economics suggests that countries with high levels of economic freedom protection of private property rights respect for the rule of law an unhampered price system and so on and policy stability commitment not to change the rules of the game ex post will be closer to the best practice frontier in our model economic freedom and policy stability affect economic performance by enhancing technical efficiency in other words these institutions do not alter the state of technology but they allow producers to squeeze more out of current technology for instance countries with more stable policies attract more foreign investment than countries with less stable policies ceteris paribus this leads to increased competition among producers which in turn brings efficiency gains similarly countries with lower taxes milder regulatory burdens lower inflation fewer restrictions on foreign ownership and so on are likely to produce output more efficiently than countries with policies that restrict production inhibit capital formation and reduce competition

malmquist type indices in the presence of negative data an application to bank branches in this paper we develop an index and an indicator of productivity change that can be used with negative data for that purpose the range directional model rdm a particular case of the directional distance function is used for computing efficiency in the presence of negative data we use rdm efficiency measures to arrive at a malmquist type index which can reflect productivity change and we use rdm inefficiency measures to arrive at a luenberger productivity indicator and relate the two the productivity index and indicator are developed relative to a fixed meta technology and so they are referred to as a meta malmquist index and meta luenberger indicator we also address the fact that vrs technologies are used for computing the productivity index and indicator a requirement under negative data which raises issues relating to the interpretability of the index we illustrate how the meta malmquist index can be used not only for comparing the performance of a unit in two time periods but also for comparing the performance of two different units at the same or different time periods the proposed approach is then applied to a sample of bank branches where negative data were involved the paper shows how the approach yields information from a variety of perspectives on performance which management can use

privatization and efficiency differentiating ownership effects from political organizational and dynamic effects this paper argues that the private public ownership factor should be differentiated from other factors that also influence the effect of privatization on efficiency this is empirically confirmed in a longitudinal study of 24 spanish firms for which several political and organizational factors are found to influence the estimated effects of privatization on efficiency the analysis of the timing of the effects reveals a strong significance for post privatization years 5 6 negative and 7 8 positive this suggests that the negative effect of these factors is transitional being eventually offset by the positive effects of the change to private ownership 2000 elsevier science b v all rights reserved jel classification l33

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

combining performance measures to investigate capacity changes in fisheries the common fisheries policy cfp aims to achieve a balance between the european fleet capacity and the resources available this can be realized either by temporarily reducing the fishing effort i e capacity utilization or quotas in the hope of increasing the resources available or reducing the actual fishing capacity in both cases the relationship between effort indicators and capacity needs to be resolved in order for the manager to introduce the right interventions previous studies have estimated these relationships in multi species fisheries using either a multi output distance function approach dfa or with a second stage data envelopment analysis dea both approaches have advantages and disadvantages in this article dea and dfa are combined to reduce noise in the estimation and to establish more useful interpretations for the manager the article compares the traditional dfa with the alternative approach for the danish north sea demersal trawlers the alternative approach improves the es

on the methodology of isew gpi and related measures some constructive suggestions and some doubt on the threshold hypothesis existing country studies of the index of sustainable economic welfare isew the genuine progress indicator gpi and related measures while sharing the same basic methodological approach differ with respect to the valuation of important items this paper provides a critical but constructive discussion of the various methods used for the valuation of non renewable resource depletion and long term environmental damage and for the weighting of consumption expenditures for income inequalities several recommendations are given on how to improve the methodology for future updates of existing studies or for the construction of new measures sensitivity analysis shows that if these recommendations are followed for the valuation of resource depletion and long term environmental damage then the so called threshold hypothesis which seems to have gained empirical support from all studies undertaken so far fails to materialise this suggests that as far as factors related to the environment are concerned the widening gap between isew and gpi on the one hand and gross national product gnp on the other might be an artefact of highly contestable methodological assumptions 2000 elsevier science b v all rights reserved

productivity growth and firm ownership an analytical and empirical investigation we focus on the effect of state versus private ownership on the rates of firm specific productivity growth and cost decline by developing a model of endogenous firm specific productivity growth and testing its implications against panel data on 23 international airlines of varying levels of state ownership over the period 1973 83 our model and empirical results show that state ownership can lower the long run annual rate of productivity growth or cost decline but not necessarily their levels in the short run observed level differences in productive efficiency across private and state owned firms may thus be a function of the age distribution of the firms being compared these results appear to be independent of whether the firms operate under apparently more or less competitive or regulated markets and whether they differ in production scales the analysis offers new insights concerning the recent trend toward privatizing state owned enterprises that has been observed in many countries

design and meaning of the genuine progress indicator a statistical analysis of the u s fifty state model abstract the genuine progress indicator gpi was designed to reveal the trade offs between costs and benefits of economic growth although originally estimated and contrasted with gross domestic product gdp at national scales an interest in a state level adoption has developed in the united states to inform and guide policy as gpi scholarship and a community of practice has developed questions have arisen about the quality and legitimacy of the gpi to investigate we apply a composite indicator analysis developed by the organization for economic co operation and development oecd to fifty us state gpi estimates using a consistent method we focus on a multi variate analysis of the structure of the composite sensitivity to weighting and aggregation assumptions and the statistical relationship with other well being indicators results are heavily influenced by a small number of components point to a number of unintended policy outcomes and have mixed relationships with allied indicators the study suggests steps towards shared gpi governance among practitioners and researchers consideration of data parsimony and potential double counting and data selection criteria to help fill gaps prioritize needs and better articulate the purpose and meaning of gpi

estimates of the genuine progress indicator gpi for vermont chittenden county and burlington from 1950 to 2000 the genuine progress indicator gpi a version of the index of sustainable economic welfare isew is a significantly more comprehensive approach to assessing economic progress than conventional measures like gross domestic product gdp gpi adjusts for income distribution effects the value of household and volunteer work costs of mobility and pollution and the depletion of social and natural capital isew or gpi have been estimated for several countries around the world and a few canadian provinces but we report here on the first multi scale application at the city county and state levels in vermont usa we show that it is feasible to apply the gpi approach at these smaller scales and to compare across scales and with the national average data limitations and problems still exist but potential solutions to these problems also exist all three vermont scales had significantly higher gpi per capita since 1980 than the national average indicating the major differences that can exist within countries the gpi per capita for all vermont scales was similar to the national average in the 1950 1980 period but more than twice the national average by 2000 the main factors explaining this difference had to do with vermont s much better environmental performance than the national average in the post 1980 period d 2004 elsevier b v all rights reserved