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The Guy at the Controls: Labor Quality and Power Plant Efficiency

In: International Differences in the Business Practices and Productivity of Firms

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  • James B. Bushnell
  • Catherine Wolfram

Abstract

This paper examines the impact of individual human operators on the fuel efficiency of power plants. Although electricity generation is a fuel and capital intensive enterprise, anecdotal evidence, interviews, and empirical analysis support the hypothesis that labor, particularly power plant operators, can have a non-trivial impact on the operating efficiency of the plant. We present evidence to demonstrate these effects and survey the policies and practices of electricity producing firms that either reduce or exacerbate fuel efficiency differences across individual plant operators.
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Suggested Citation

  • James B. Bushnell & Catherine Wolfram, 2009. "The Guy at the Controls: Labor Quality and Power Plant Efficiency," NBER Chapters, in: International Differences in the Business Practices and Productivity of Firms, pages 79-102, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberch:0443
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    7. Kira R. Fabrizio & Nancy L. Rose & Catherine D. Wolfram, 2007. "Do Markets Reduce Costs? Assessing the Impact of Regulatory Restructuring on US Electric Generation Efficiency," American Economic Review, American Economic Association, vol. 97(4), pages 1250-1277, September.
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    Cited by:

    1. Steven D. Levitt & John A. List & Chad Syverson, 2013. "Toward an Understanding of Learning by Doing: Evidence from an Automobile Assembly Plant," Journal of Political Economy, University of Chicago Press, vol. 121(4), pages 643-681.
    2. Andrea Lasagni & Annamaria Nifo & Gaetano Vecchione, 2015. "Firm Productivity And Institutional Quality: Evidence From Italian Industry," Journal of Regional Science, Wiley Blackwell, vol. 55(5), pages 774-800, November.
    3. Emerick, Kyle & Burke, Marshall & Maue, Casey, 2020. "Productivity dispersion and persistence among the world’s most numerous firms," CEPR Discussion Papers 14553, C.E.P.R. Discussion Papers.
    4. Agostino, Mariarosaria & Nifo, Annamaria & Trivieri, Francesco & Vecchione, Gaetano, 2016. "Total factor productivity heterogeneity: channelling the impact of institutions," MPRA Paper 72759, University Library of Munich, Germany.
    5. Zaida Contreras, Tihomir Ancev, and Regina Betz, 2014. "Evaluation of Environmental Taxation on Multiple Air Pollutants in the Electricity Generation Sector - Evidence from New South Wales, Australia," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).
    6. Eric J. Bartelsman & Zoltan Wolf, 2017. "Measuring Productivity Dispersion," Tinbergen Institute Discussion Papers 17-033/VI, Tinbergen Institute.
    7. Troy D. Smith, 2015. "Private Equity Investment in India: Efficiency vs Expansion," Discussion Papers 15-011, Stanford Institute for Economic Policy Research.
    8. Stefan Seifert, 2015. "Measuring Productivity When Technologies Are Heterogeneous: A Semi-Parametric Approach for Electricity Generation," Discussion Papers of DIW Berlin 1526, DIW Berlin, German Institute for Economic Research.
    9. Chad Syverson, 2011. "What Determines Productivity?," Journal of Economic Literature, American Economic Association, vol. 49(2), pages 326-365, June.
    10. Zach Flynn, 2020. "Identifying productivity when it is a factor of production," RAND Journal of Economics, RAND Corporation, vol. 51(2), pages 496-530, June.
    11. Maue, Casey C. & Burke, Marshall & Emerick, Kyle, 2020. "Productivity dispersion and persistence among the world's most numerous firms," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304287, Agricultural and Applied Economics Association.
    12. Hei Sing (Ron) Chan & Maureen L. Cropper & Kabir Malik, 2014. "Why Are Power Plants in India Less Efficient Than Power Plants in the United States?," American Economic Review, American Economic Association, vol. 104(5), pages 586-590, May.
    13. Sergio Bautista-Arredondo & Gina La Hera-Fuentes & David Contreras-Loya & Ada Kwan & S Janae Van Buren & Ogbonna O Amanze & Akinyemi Atobatele & Adedayo Adeyemi & Emmanuel Abatta & Kayode M Ogungbemi , 2018. "Efficiency of HIV services in Nigeria: Determinants of unit cost variation of HIV counseling and testing and prevention of mother-to-child transmission interventions," PLOS ONE, Public Library of Science, vol. 13(9), pages 1-19, September.

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    More about this item

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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