Nonparametric production technologies with weakly disposable inputs

In models of production theory and efficiency analysis, the inputs and outputs are assumed to satisfy some form of disposability. In this paper, we consider the assumption of weak input disposability. It states that any activity remains feasible if its inputs are simultaneously scaled up in the same proportion. As suggested in the literature, the Shephard technology incorporating weak input disposability could be used to evaluate the effect of input congestion. We show that the Shephard technology is not convex and therefore introduces bias in evaluation of congestion. To address this, we develop an alternative convex technology whose use in the evaluation of congestion removes the noted bias. We undertake a further axiomatic investigation and obtain a range of production technologies, all of which exhibit weak input disposability but are based on different, progressively relaxed, convexity assumptions. Apart from the evaluation of input congestion, such technologies should also be useful in applications in which some inputs are closely related or are overlapping, and therefore satisfy only the weak input disposability assumption incorporated in the new models

Animals’ Health Control Efficiency in Northwest Portugal: A Two-stage DEA Approach

A two-stage approach is employed to analyze the efficiency of cooperatives responsible for ruminants’ disease control (OPP) at the farm level in Northwest Portugal. In the first stage, Data Envelopment Analysis (DEA) is used to estimate and decompose input-based overall inefficiency for each OPP. The input-based inefficiency measures are generated using the directional input distance function. In the second stage, the inefficiency estimates are regressed on environmental and organizational factors in order to explain efficiency differentials. Despite substantial environmental differences, the empirical results indicate that most cooperatives can reduce costs by improving scale efficiency and pure technical efficiency.input directional distance function, bootstrapping, economic efficiency, animal health services., Agricultural and Food Policy,

Animals’ health control efficiency in Northwest Portugal: A two-stage DEA approach.

A two-stage approach is employed to analyze the efficiency of cooperatives responsible for ruminants’ disease control (OPP) at the farm level in Northwest Portugal. In the first stage, Data Envelopment Analysis (DEA) is used to estimate and decompose input-based overall inefficiency for each OPP. The input-based inefficiency measures are generated using the directional input distance function. In the second stage, the inefficiency estimates are regressed on environmental and organizational factors in order to explain efficiency differentials. Despite substantial environmental differences, the empirical results indicate that most cooperatives can reduce costs by improving scale efficiency and pure technical efficienc

Quality Production and Quality Indicators in Intermediate Products

The paper proposes a methodology to measure the characteristics of intermediate products when quality is multidimensional. It uses a general representation of the multioutput technology via directional distance functions and constructs quality indicators based on differences. The quality indicators may be used to evaluate firms’ output taking into account the whole set of quality attributes. It explores the relationships among the different quality attributes and the yields by a systematic investigation of the disposability properties of the technology. In addition, it shows how aggregate quality may vary with the production level.Quality indicators, multidimensional quality, performance measures, DEA.

Interregional Comparison of Agricultural Productivity Growth, Technical Progress, and Efficiency Change in China's Agriculture: A Nonparametric Index Approach

A linear programming technique is used to decompose agricultural factor productivity change in China's provinces during the period 1985 to 1994. The method allows the decomposition of productivity growth into two mutually exclusive and exhaustive parts: technological change and changes in pure technical efficiency. The decomposition provides a natural way to differentiate innovations from catching up phenomena in China's agriculture

A B-convex production model for evaluating performance of firms

AbstractSome 30 years ago Charnes, Cooper and Rhodes [A. Charnes, W.W. Cooper, E. Rhodes, Measuring the efficiency of decision making units, European J. Oper. Res. 2 (6) (1978) 429–444] proposed DEA (Data Envelopement Analysis) as a mean of measuring and evaluating performance of firms. This paper proposes a model for production technologies which differs from the traditional DEA production model. The usual convex framework of the DEA model is replaced by an order theoretical condition: if two input vectors can produce a given output then the maximum coordinatewise of these two vectors can produce that same output. In this model, technologies are dually linked by a min–max cost function that is dual to the Shephard's distance function. Assuming free disposal of outputs these technologies can be completely described and the Shephard's distance function can be given in closed form

Greenhouse gas emissions and the productivity growth of electricity generators

This paper analyses electricity generation in four Australian states and the Northern Territory in the late 1990s It finds that productivity growth estimates for electricity generators can change significantly when allowance is made for greenhouse gas emissions. Using an innovative analytical technique for incorporating environmental impacts in productivity estimates, it shows that productivity growth is overestimated when emission intensity is rising and underestimated when emission intensity is falling. This is because emissions are undesirable and so if they fall (grow) per unit of output then this will tend to increase (decrease) estimated productivity.greenhouse gas emissions - productivity growth - electricity - abatement

Underestimation of Inefficiency in Social Efficiency Benchmarking with Non-Parametric Methods of Production Technology Identification: A Note

経済学 / EconomicsIn the conventional social productive efficiency measurement, a DEA-based non-parametric method is typically employed to identify the piece-wise-linear production possibility frontier. Applying the directional distance-function approach a-la Luenberger (1992) to the production possibility frontier obtained in this fashion can, however, lead to an underestimation of inefficiency for a DMU with relatively large undesirable outputs. This underestimation becomes more acute if the sample size is small or data are clustered. This paper reveals the mechanism behind this underestimation bias, and then quantifies the degree of underestimation using nine-year panel data of rail and aviation sectors in Japan. Through a comparative analysis between parametric and non-parametric methods, we find, among others, that the underestimation of the aviation sector’s productive inefficiency is as large as 80%, which the non-parametric method failed to detect.http://www.grips.ac.jp/list/jp/facultyinfo/yoshida_yuichiro

Tax morale and public spending inefficiency

Tax evasion is a widespread phenomenon and encouraging tax compliance is an important and much debated policy issue. Many studies have shown that tax cheating has to be attributed to a considerable extent to the tax morale of taxpayers. The aim of the present paper is to shed light on the relationship between the taxpayer and the public sector. Specifically, we investigate whether public spending inefficiency shapes individual tax morale. Combining data from Italian municipalities’ balance sheets with individual data from a properly designed survey on tax morale, we find that the attitude towards paying taxes is better when resources are spent more efficiently. This does not appear to be due to some confounding factors at the municipality level or to spatial sorting of citizens. It is also robust to alternative measures of both inefficiency and tax morale.tax morale, public spending inefficiency