Cost and productivity
AbstractThis study develops an analytical model capable of decomposing both intertemporal and multilateral cost variation. It begins by attributing cost variation to a price effect and a quantity effect. Then the quantity effect is decomposed into a productivity effect and an activity effect. The productivity effect in turn decomposes into a cost efficiency effect and, in the intertemporal context, a technical change effect. This paper also shows how the intertemporal and multilateral cost decompositions can be implemented, using linear programming techniques. These techniques offer certain advantages over conventional econometric techniques whenever a substantial portion of cost variation is due to variation in cost efficiency. The two cost decompositions are illustrated with a pair of benchmarking exercises based on a panel of 93 US electric power generating companies, in which variation in cost efficiency does play a key role. Copyright © 2000 John Wiley & Sons, Ltd.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoArticle provided by John Wiley & Sons, Ltd. in its journal Managerial and Decision Economics.
Volume (Year): 21 (2000)
Issue (Month): 1 ()
Contact details of provider:
Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/7976
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.:
- Greene, William H., 1980. "Maximum likelihood estimation of econometric frontier functions," Journal of Econometrics, Elsevier, vol. 13(1), pages 27-56, May.
- Schmidt, Peter & Knox Lovell, C. A., 1979. "Estimating technical and allocative inefficiency relative to stochastic production and cost frontiers," Journal of Econometrics, Elsevier, vol. 9(3), pages 343-366, February.
- Stevenson, Rodney E., 1980. "Likelihood functions for generalized stochastic frontier estimation," Journal of Econometrics, Elsevier, vol. 13(1), pages 57-66, May.
- Afriat, Sidney N, 1972. "Efficiency Estimation of Production Function," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 13(3), pages 568-98, October.
- Gollop, Frank M & Karlson, Stephen H, 1978. "The Impact of the Fuel Adjustment Mechanism on Economic Efficiency," The Review of Economics and Statistics, MIT Press, vol. 60(4), pages 574-84, November.
- Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
- Kumbhakar, Subal C., 1997. "Modeling allocative inefficiency in a translog cost function and cost share equations: An exact relationship," Journal of Econometrics, Elsevier, vol. 76(1-2), pages 351-356.
- R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
- Subhash Ray, 2012. "Productivity Change over Time and the Dynamics of Cost Competitiveness: A Nonparametric Analysis of U.S. Manufacturing Data," Working papers 2012-39, University of Connecticut, Department of Economics.
- Ray, Subhash C. & Chen, Lei & Mukherjee, Kankana, 2008.
"Input price variation across locations and a generalized measure of cost efficiency,"
International Journal of Production Economics,
Elsevier, vol. 116(2), pages 208-218, December.
- Subhash C. Ray & Lei Chen & Kankana Mukherjee, 2008. "Input Price Variation Across Locations and a Generalized Measure of Cost Efficiency," Working papers 2008-11, University of Connecticut, Department of Economics.
- Kevin J. Fox & R. Quentin Grafton & James Kirkley & Dale Squires, 2002.
"Property Rights in a Fishery: Regulatory Change and Firm Performance,"
Economics and Environment Network Working Papers
0205, Australian National University, Economics and Environment Network.
- Fox, Kevin J. & Grafton, R. Quentin & Kirkley, James & Squires, Dale, 2003. "Property rights in a fishery: regulatory change and firm performance," Journal of Environmental Economics and Management, Elsevier, vol. 46(1), pages 156-177, July.
- Bruno De Borger & Kristiaan Kerstens & Diego Prior & Ignace Van de Woestyne, 2013.
"Static efficiency decompositions and capacity utilization: integrating economic and technical capacity notions,"
Taylor & Francis Journals, vol. 45(24), pages 3529-3529, August.
- Bruno De Borger & Kristiaan Kerstens & Diego Prior & Ignace Van de Woestyne, 2012. "Static efficiency decompositions and capacity utilization: integrating economic and technical capacity notions," Applied Economics, Taylor & Francis Journals, vol. 44(31), pages 4125-4141, November.
- Van de Woestyne, Ignace & Kerstens, Kristiaan & Prior, Diego & De Borger, Bruno, 2009. "Static Efficiency Decompositions and Capacity Utilisation: Integrating Economic and Technical Capacity Notions," Working Papers 2009/30, Hogeschool-Universiteit Brussel, Faculteit Economie en Management.
- Portela, Maria Conceição A. Silva & Thanassoulis, Emmanuel, 2014. "Economic efficiency when prices are not fixed: disentangling quantity and price efficiency," Omega, Elsevier, vol. 47(C), pages 36-44.
- Robert Chambers, 2008. "Stochastic productivity measurement," Journal of Productivity Analysis, Springer, vol. 30(2), pages 107-120, October.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.