The returns to scale effect in labour productivity growth

Labour productivity is defined as output per unit of labour input. Economists acknowledge that technical progress as well as growth in capital inputs increases labour productivity. However, little attention has been paid to the fact that changes in labour input alone could also impact labour productivity. Since this effect disappears for the constant returns to scale short-run production frontier, we call it the returns to scale effect. We decompose the growth in labour productivity into two components: 1) the joint effect of technical progress and capital input growth, and 2) the returns to scale effect. We propose theoretical measures for these two components and show that they coincide with the index number formulae consisting of prices and quantities of inputs and outputs. We then apply the results of our decomposition to U.S. industry data for 1987–2007. It is acknowledged that labour productivity in the services industries grows much more slowly than in the goods industries. We conclude that the returns to scale effect can explain a large part of the gap in labour productivity growth between the two industry groups.Labour productivity, index numbers, Malmquist index, Törnqvist index, output distance function, input distance function

New indices of labour productivity growth: Baumol’s disease revisited

We introduce two new indexes of labour productivity growth. Both indexes are intended to capture the shift in the short-run production frontier, which can be attributed to technological progress or growth in capital inputs. The two indexes adopt distinct approaches to measuring the distance between the production frontiers. One is based on the distance function and the other is based on the profit function. In the end, we show that these two theoretical measures coincide with the index number formulae that are computable from the observable prices and quantities of output and input. By applying these formulae to the U.S. industry data of the years 1970–2005, we compare newly proposed index of labour productivity growth with the growth of average labour productivity over periods and across industries. We revisit the hypothesis of Baumol’s disease throughout our observations on the trend of industry labour productivities in the service sector.Labour productivity, index numbers, Malmquist index, Törnqvist index, output distance function, input distance function, Baumol’s disease, service sector

Maximal Domain for Strategy-Proof Rules in Allotment Economies

We consider the problem of allocating an amount of a perfectly divisible good among a group of n agents. We study how large a preference domain can be to allow for the existence of strategy-proof, symmetric, and efficient allocation rules when the amount of the good is a variable. This question is qualified by an additional requirement that a domain should include a minimally rich domain. We first characterize the uniform rule (Bennasy, 1982) as the unique strategy-proof, symmetric, and efficient rule on a minimally rich domain when the amount of the good is fixed. Then, exploiting this characterization, we establish the following: There is a unique maximal domain that includes a minimally rich domain and allows for the existence of strategy-proof, symmetric, and efficient rules when the amount of good is a variable. It is the single-plateaued domain.

Exact and Superlative Price and Quantity Indicators

The traditional economic approach to index number theory is based on a ratio concept. The Konüs true cost of living index is a ratio of cost functions evaluated at the same utility level but with the prices of the current period in the cost function that appears in the numerator and the prices of the base period in the denominator cost function. The Allen quantity index is also a ratio of cost functions where the utility levels vary but the price vector is held constant in the numerator and denominator. There is a corresponding theory for differences of cost functions that was initiated by Hicks and the present paper develops this approach. Diewert defined superlative price and quantity indexes as observable indexes which were exact for a ratio of unit cost functions or for a ratio of linearly homogeneous utility functions. The present paper looks for counterparts to his results in the difference context, for both flexible homothetic and flexible nonhomothetic preferences. The Bennet indicators of price and quantity change turn out to be superlative for the nonhomothetic case. The underlying preferences are of the translation homothetic form discussed by Balk, Chambers, Dickenson, Färe and Grosskopf.Price and quantity aggregates, index number theory, equivalent and compensating variations, exact and superlative indexes, flexible functional forms,

Simulation Studies on the CO2 Emission Reduction Efficiency in Spatial Econometrics: A case of Japan

In this paper, we estimate the CO2 emission function based on the production function, taking into account the interregional spillover effect in Japan. Using the estimated result, we propose suitable means of simulation using spatial econometrics and simulate which prefecture can reduce the CO2 emission most efficiently. Our results indicate that prefectures that are located in urban areas reduce CO2 emissions more efficiently than do those located far from urban spaces.Carbon dioxide (CO2)

Investigating the Usability of the Stylus Pen on Handheld Devices

Many handheld devices with stylus pens are available on the market, however, there have been few studies which examine the effects of the size of the stylus pen on user performance and subjective preferences for hand-held device interfaces. Two experiments were conducted to determine the most suitable dimensions (pen-length, pen-tip width and pen-width) for a stylus pen. In Experiment 1, five pen-lengths (7, 9, 11, 13, 15 cm) were evaluated. In Experiment 2, six combinations of three pen-tip widths (0.5, 1.0 and 1.5mm) and the two pen widths (4 and 7mm) were compared. In both experiments, subjects conducted pointing, steering and writing tasks on a PDA. The results were assessed in terms of user performance and subjective evaluations for all three pointing, steering and writing tasks. We determined that the most suitable pen dimensions were 11 cm for length, 0.5 mm for tip width, and 7mm for pen width