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Prevailing wage legislation and public school construction efficiency: a stochastic frontier approach

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  • Kevin Duncan
  • Peter Philips
  • Mark Prus

Abstract

Stochastic frontier regression is used to examine the effect of introducing prevailing wage legislation on public school construction efficiency in British Columbia. Prior to the legislation, public school projects were from 16% to 19% smaller, in terms of square feet, than comparable private structures. However, likelihood ratio tests consistently indicate that the coefficients measuring the effect of the policy on the size differential between covered and uncovered projects are not statistically different from zero. These results suggest that construction wage requirements did not alter input utilisation in a way that significantly affected construction output. Average inefficiency for school construction in British Columbia over the period of the study is 12.1%.

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File URL: http://www.tandfonline.com/doi/abs/10.1080/01446190600601719
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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Construction Management and Economics.

Volume (Year): 24 (2006)
Issue (Month): 6 ()
Pages: 625-634

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Handle: RePEc:taf:conmgt:v:24:y:2006:i:6:p:625-634

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Related research

Keywords: Prevailing wage laws; regression analysis;

References

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  1. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
  2. Dolton, Peter & Marcenaro, Oscar D. & Navarro, Lucia, 2003. "The effective use of student time: a stochastic frontier production function case study," Economics of Education Review, Elsevier, vol. 22(6), pages 547-560, December.
  3. Allen, Steven G, 1987. "Can Union Labor Ever Cost Less?," The Quarterly Journal of Economics, MIT Press, vol. 102(2), pages 347-73, May.
  4. Paul Bishop & Steven Brand, 2003. "The efficiency of museums: a stochastic frontier production function approach," Applied Economics, Taylor & Francis Journals, vol. 35(17), pages 1853-1858.
  5. Steven G. Allen, 1983. "Unionization and Productivity in Office Building and School Construction," NBER Working Papers 1139, National Bureau of Economic Research, Inc.
  6. Steven G. Allen, 1986. "Unionization and productivity in office building and school construction," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 39(2), pages 187-201, January.
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