TEXAS FIELD CROPS: ESTIMATION WITH CURVATURE

Some implications of theory are easily maintained in econometric estimation, but computational costs of maintaining curvature properties (sufficient for existence of an optimal solution) have often proved prohibitive. They also have been violated frequently by unrestricted econometric estimates. A computationally manageable procedure for maintaining and testing curvature is used here to obtain estimates of product supplies and input demands for Texas field crops consistent with the theory of the competitive industry. The curvature properties are tested along with several technology restrictions.Crop Production/Industries,

Optimal Capacity Utilization and Reallocation in a German Bank Branch Network: Exploring Some Strategic Scenarios

Quite a few studies have considered efficiency at the bank branch level by comparing mostly a single branch network, while an abundance of studies have focused on comparing banking institutions. However, to the best of our knowledge no study has ever assessed performance at the level of the branch bank network by looking for ways to reallocate resources such that overall performance improves. Here, we introduce the Johansen-Färe measure of plant capacity of the firm into a multi-output, frontier-based version of the short-run Johansen industry model. The first stage capacity model carefully checks for the impact of the convexity assumption on the estimated capacity utilization results. Policy scenarios considered for the short-run Johansen industry model vary in terms of their tolerance with respect to existing bank branch inefficiencies, the formulation of closure policies, the reallocation of labor in terms of integer units, etc. The application to a network of 142 bank branches of a German savings bank in the year 1998 measures their efficiency and capacity utilization and demonstrate that by this industry model approach one can improve the performance of the whole branch network.Bank Branch Network, Efficiency, Capacity, Reallocation

Shock dynamics of phase diagrams

A thermodynamic phase transition denotes a drastic change of state of a physical system due to a continuous change of thermodynamic variables, as for instance pressure and temperature. The classical van der Waals equation of state is the simplest model that predicts the occurrence of a critical point associated with the gas-liquid phase transition. Nevertheless, below the critical temperature, theoretical predictions of the van der Waals theory significantly depart from the observed physical behaviour. We develop a novel approach to classical thermodynamics based on the solution of Maxwell relations for a generalised family of nonlocal entropy functions. This theory provides an exact mathematical description of discontinuities of the order parameter within the phase transition region, it explains the universal form of the equations of state and the occurrence of triple points in terms of the dynamics of nonlinear shock wave fronts

Estimating the Potential Gains from Mergers: The Danish Agricultural Extension Services

We introduce simple non-parametric models to estimate the potential gains from merging production units. Three effects are distinguished. A merger may affect technical efficiency. It also affects the size of the operation which may or may not be advantageous depending on the return to scale properties of the underlying technologies. Lastly, it affects the mix of inputs available and the mix of outputs demanded. A merged unit face more "balanced" or "harmonic" input and output profiles which is typically advantageous. We use the model to estimate the potential gains from merging agricultural extension offices in Denmark.Teaching/Communication/Extension/Profession,

MULTIPLE-OUTPUT PRODUCTION MODELED WITH THREE FUNCTIONAL FORMS

Aggregate dual models are specified to examine multiple-output production relationships in each of four major, geographically dispersed, agricultural states (California, Iowa, Texas, and Florida). Three locally-flexible functional forms (translog, generalized Leontief, and normalized quadratic) are employed to conduct analytic simplification tests, estimate systems of output supply and input demand equations consistent with nonrejected hypotheses, derive elasticities, and determine to what extent analytic simplification tests and policy-relevant results are sensitive to functional form and state. Important differences in empirical implications were found due both to functional form and geographic unit, but differences were greater for the latter.Production Economics,

Productive efficiency and regulatory reform: The case of vehicle inspection services.

Measuring productive efficiency provides information on the likely effects of regulatory reform. We present a Data Envelopment Analysis (DEA) of a sample of 38 vehicle inspection units under a concession regime, between the years 2000 and 2004. The differences in efficiency scores show the potential technical efficiency benefit of introducing some form of incentive regulation or of progressing towards liberalization. We also compute scale efficiency scores, showing that only units in territories with very low population density operate at a sub-optimal scale. Among those that operate at an optimal scale, there are significant differences in size; the largest ones operate in territories with the highest population density. This suggests that the introduction of new units in the most densely populated territories (a likely effect of some form of liberalization) would not be detrimental in terms of scale efficiency. We also find that inspection units belonging to a large, diversified firm show higher technical efficiency, reflecting economies of scale or scope at the firm level. Finally, we show that between 2002 and 2004, a period of high regulatory uncertainty in the sample’s region, technical change was almost zero. Regulatory reform should take due account of scale and diversification effects, while at the same time avoiding regulatory uncertainty.Productive Efficiency, Regulatory Reform, Vehicle Inspections.

ESTIMATING NON-CONCAVE METAFRONTIERS USING DATA ENVELOPE ANALYSIS

In this article we propose non-concave metafrontiers for estimating the inefficiency among production functions which do not necessarily belong to the same technology. In this case, estimating a joint production by literature approaches might be inappropriate. We call this inefficiency technological inefficiency and suggest Data Envelopment Analysis to construct a metafrontier production function which consists only of parts of different (group) frontier production functions. Thus, in contrast to the common literature our metafrontier does not need any assumptions additional to the group production functions. We illustrate our approach by means of a large sample of differently diversified crop farms. Results show that the literature approach overestimates the technological inefficiency in our sample for 75% of the observations and on average up to 7%-points in a diversification class of farms.Efficiency analysis, Metafrontier production function, Data Envelopment Analysis, Production Economics,