Measuring productivity growth under factor non-substitution: An application to US steam-electric power generation utilities
AbstractA theoretical framework is developed for decomposing partial factor productivity and measuring technical inefficiency when the underlying technology is characterized by factor non-substitution. With Farrell’s (1957) radial index of technical inefficiency being inappropriate in this case, Russell non-radial indices are adapted to measure technical inefficiency in a Leontief-type model. A system of factor demand equations with a regime specific technical inefficiency term is proposed and estimated allowing for dependence across inputs using a copula approach. Then the paper presents a complete decomposition of partial factor productivity changes using a dataset of US steam-power electric generation utilities.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal European Journal of Operational Research.
Volume (Year): 220 (2012)
Issue (Month): 3 ()
Contact details of provider:
Web page: http://www.elsevier.com/locate/eor
Productivity and competitiveness; OR in energy; Productivity growth; Technical efficiency; Factor non-substitution; Leontief-type technologies;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Cherchye, Laurens & Van Puyenbroeck, Tom, 2009. "Semi-radial technical efficiency measurement," European Journal of Operational Research, Elsevier, vol. 193(2), pages 616-625, March.
- Granderson, Gerald & Linvill, Carl, 2002. "Regulation, efficiency, and Granger causality," International Journal of Industrial Organization, Elsevier, vol. 20(9), pages 1225-1245, November.
- Steven Buccola & Jayashree Sil, 1996. "Productivity Measurement in the Agricultural Marketing Sector," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(5), pages 1366-1371.
- Vuong, Quang H, 1989. "Likelihood Ratio Tests for Model Selection and Non-nested Hypotheses," Econometrica, Econometric Society, vol. 57(2), pages 307-33, March.
- Supawat Rungsuriyawiboon & Spiro E. Stefanou, 2003.
"Dynamic Efficiency Estimation: An Application to US Electric Utilities,"
CEPA Working Papers Series
WP052003, School of Economics, University of Queensland, Australia.
- Rungsuriyawiboon, Supawat & Stefanou, Spiro E., 2007. "Dynamic Efficiency Estimation: An Application to U.S. Electric Utilities," Journal of Business & Economic Statistics, American Statistical Association, vol. 25, pages 226-238, April.
- Trivedi, Pravin K. & Zimmer, David M., 2007. "Copula Modeling: An Introduction for Practitioners," Foundations and Trends(R) in Econometrics, now publishers, vol. 1(1), pages 1-111, April.
- Athanassopoulos, Antreas D. & Lambroukos, Nikos & Seiford, Lawrence, 1999. "Data envelopment scenario analysis for setting targets to electricity generating plants," European Journal of Operational Research, Elsevier, vol. 115(3), pages 413-428, June.
- John Haldi & David Whitcomb, 1967. "Economies of Scale in Industrial Plants," Journal of Political Economy, University of Chicago Press, vol. 75, pages 373.
- Fare, Rolf & Knox Lovell, C. A., 1978. "Measuring the technical efficiency of production," Journal of Economic Theory, Elsevier, vol. 19(1), pages 150-162, October.
- Darold Barnum & John Gleason, 2011. "Measuring efficiency under fixed proportion technologies," Journal of Productivity Analysis, Springer, vol. 35(3), pages 243-262, June.
- Robert Russell, R., 1985. "Measures of technical efficiency," Journal of Economic Theory, Elsevier, vol. 35(1), pages 109-126, February.
- Boris Bravo-Ureta & Daniel Solís & Víctor Moreira López & José Maripani & Abdourahmane Thiam & Teodoro Rivas, 2007. "Technical efficiency in farming: a meta-regression analysis," Journal of Productivity Analysis, Springer, vol. 27(1), pages 57-72, February.
- Atkinson, Scott E. & Primont, Daniel, 2002. "Stochastic estimation of firm technology, inefficiency, and productivity growth using shadow cost and distance functions," Journal of Econometrics, Elsevier, vol. 108(2), pages 203-225, June.
- Kopp, Raymond J, 1981. "The Measurement of Productive Efficiency: A Reconsideration," The Quarterly Journal of Economics, MIT Press, vol. 96(3), pages 477-503, August.
- Nakamura, Shinichiro, 1990. "A Nonhomothetic Generalized Leontief Cost Function Based on Pooled Data," The Review of Economics and Statistics, MIT Press, vol. 72(4), pages 649-56, November.
- L. Dean Hiebert, 2002. "The Determinants of the Cost Efficiency of Electric Generating Plants: A Stochastic Frontier Approach," Southern Economic Journal, Southern Economic Association, vol. 68(4), pages 935-946, April.
- Lau, Lawrence J & Tamura, Shuji, 1972. "Economies of Scale, Technical Progress, and the Nonhomothetic Leontief Production Function: An Application to the Japanese Petrochemical Processing Industry," Journal of Political Economy, University of Chicago Press, vol. 80(6), pages 1167-87, Nov.-Dec..
- Reifschneider, David & Stevenson, Rodney, 1991. "Systematic Departures from the Frontier: A Framework for the Analysis of Firm Inefficiency," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(3), pages 715-23, August.
- Torben Holvad & Jens Hougaard & Dorte Kronborg & Hans Kvist, 2004. "Measuring inefficiency in the Norwegian bus industry using multi-directional efficiency analysis," Transportation, Springer, vol. 31(3), pages 349-369, August.
- Garth Holloway & Quirino Paris, 2002. "Production Efficiency in the von Liebig Model," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(5), pages 1271-1278.
- Silberberg, Eugene, 1972. "Duality and the Many Consumer's Surpluses," American Economic Review, American Economic Association, vol. 62(5), pages 942-52, December.
- Martin van Ittersum & Ada Wossink, 2006. "Integrating Agronomic Principles into Production Function Specification: A Dichotomy of Growth Inputs and Facilitating Inputs," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(1), pages 203-214.
- Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-32.
- Kodde, David A & Palm, Franz C, 1986. "Wald Criteria for Jointly Testing Equality and Inequality Restriction s," Econometrica, Econometric Society, vol. 54(5), pages 1243-48, September.
- Silva Portela, Maria Conceicao A. & Thanassoulis, Emmanuel, 2005. "Profitability of a sample of Portuguese bank branches and its decomposition into technical and allocative components," European Journal of Operational Research, Elsevier, vol. 162(3), pages 850-866, May.
- Lindebo, Erik & Hoff, Ayoe & Vestergaard, Niels, 2007. "Revenue-based capacity utilisation measures and decomposition: The case of Danish North Sea trawlers," European Journal of Operational Research, Elsevier, vol. 180(1), pages 215-227, July.
- Hulten, Charles R, 1973. "Divisia Index Numbers," Econometrica, Econometric Society, vol. 41(6), pages 1017-25, November.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.