The Forgotten Second Quartile: Parental Income and Youth Post-secondary Education Enrolment in Australia

The relationship between parental income and the post-secondary education enrolment of youth aged 18-19 in Australia is investigated. Firstly, Census data from 1991 to 2006 are employed using the sample of youth still residing with parents. HILDA data are then used to analyze all youth over the 2004-2008 period, irrespective of living arrangements. The estimates highlight a strongly convex relationship for university enrolment, with enrolment rates essentially the same for the lowest two parental income quartiles, rising moderately for the third quartile then steeply for the top income quartile. This pattern is also observed if either parental occupation or postcode-based SES measures are employed rather than parental income. For other post-secondary enrolment, the relationship is an inverted U-shape. Parental education levels may have a large role in understanding these relationships.university enrolment; parental income; equity

Credential Changes and Education Earnings Premia in Australia

We find that post-school education earnings premia have remained strikingly stable over the 1981 to 2003-04 period in Australia. This stability is in sharp contrast to the rising college premium observed in the US. The observed stability in Australia may in part be due to changes in the credentials earned by individuals entering certain professional occupations during the 1980s and early 1990s, particularly for females. We provide an estimate of the potential effect of within-occupation credential changes on estimates of education earnings premia in Australia over time. Our focus is on credential changes within the nursing and teaching professions, which have moved from predominately certificate and diploma qualifications to university bachelor’s degree or higher as the standard qualificationeducation; earnings structure; wage premium; credentials; Australia

Performance Measurement in the Australian Water Supply Industry

Various government-owned businesses provide water supply services to Australian residents. With the advent of recent competition and regulatory reforms in infrastructure industries in Australia, more and more of these businesses are now facing new types of incentive-based regulatory regimes. This has led to a desire for more information on the performance of these businesses, both relative to each other and over time. In this study we use panel data on the 18 largest Australian water services businesses, observed over an eight-year period from 1995/6 to 2002/3, to measure the relative efficiency and productivity growth of these businesses. Data envelopment analysis (DEA) methods are used to obtain estimates of the multi-input, multi-output production technology. The potential use of these performance measures in price-cap regulation is discussed, where the effects of variable selection and data quality upon empirical results is emphasised.

Regulatory Reform and Economic Performance in US Electricity Generation

In this paper we investigate the effect of the introduction of incentive regulation upon the total factor productivity (TFP) growth of electricity generation companies in the United States, using sample data on 61 firms observed over a 13-year period from 1986 to 1998. Empirical estimates of TFP growth are obtained using three techniques: Tornqvist index numbers, a stochastic cost frontier and a stochastic input distance function. The results obtained using the stochastic cost frontier are discarded because they are found to differ from those obtained using the other techniques, apparently as a consequence of violations of the required cost minimizing behavioral assumptions, which are not uncommon in regulated industries. Tests of hypotheses regarding the effect of regulatory reform upon TFP (using the distance function results) indicate that the introduction of incentive regulation has not had the desired positive effect upon the economic performance of the firms involved. In fact, in the case of these data, we find that performance is negatively related with the introduction of the new regulatory regimes, a result that is the opposite of the theoretical predictions.

Indicators of Inflationary Pressure

This paper examines the statistical properties of a number of leading indicators of inflation, using Australian data over the period 1966 through 1991. We pay particular attention to the much-discussed P*, as well as measures of capacity utilisation, the cyclical rate of unemployment and the growth rate of a monetary aggregate (currency). Our results show that, up until mid 1990, the gap between trend and observed velocity of currency, as well as the growth rate of currency performed well as inflation indicators. Since then, the rapid decline in inflation has been best predicted by variables such as the level of capacity utilisation, the rate of cyclical unemployment, and the gap between output and its trend value.

The Effects of Competition Policy on TFP Growth: Some Evidence from the Malaysian Electricity Supply Industry

The main objectives of this paper are to measure total factor productivity (TFP) growth in the electricity supply industry in Peninsular Malaysia from 1975 to 2005 and to assess the impact of private entry reforms upon TFP in this industry. Prior to 1995, a government-linked, vertically-integrated electricity utility, Tenaga Nasional Berhad (TNB), was essentially the sole operator. However, since 1995 privately-owned Independent Power Producers (IPPs) have also begun generating electricity, all of which is purchased by TNB under fixed Power Purchase Agreements (PPAs). The introduction of IPPs has reduced the need for TNB to find finance for new power plants. It has been argued that the participation of IPPs in the electricity generation industry should also facilitate improvements in industry productivity; however this proposition is yet to be tested. In this study we calculate TFP growth using Törnqvist index methods, finding that there is no direct evidence of productivity improvements attributable to the privatization. Furthermore, it is not clear that consumers have benefited from this, since the PPAs have generally been quite generous to the IPPs in terms of risk sharing and prices paid.

A Bayesian Approach To Imposing Curvature On Distance Functions

The estimated parameters of output distance functions frequently violate the monotonicity, quasiconvexity and convexity constraints implied by economic theory, leading to estimated elasticities and shadow prices that are incorrectly signed, and ultimately to perverse conclusions concerning the effects of input and output changes on productivity growth and relative efficiency levels. We show how a Bayesian approach can be used to impose these constraints on the parameters of a translog output distance function. Implementing the approach involves the use of a Gibbs sampler with data augmentation. A Metropolis-Hastings algorithm is also used within the Gibbs to simulate observations from truncated pdfs. Our methods are developed for the case where panel data is available and technical inefficiency effects are assumed to be time-invariant. Two models � a fixed effects model and a random effects model � are developed and applied to panel data on 17 European railways. We observe significant changes in estimated elasticities and shadow price ratios when regularity restrictions are imposed