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Estimating allocative efficiency in port authorities with demand uncertainty

Author

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  • Hidalgo, Soraya
  • Núñez-Sánchez, Ramón

Abstract

This paper aims to analyse the impact of port demand variability on the allocative efficiency of Spanish port authorities during the period 1986-2007. From a distance function model we can obtain a measure of allocative efficiency using two different approaches: error components approach and parametric approach. We model the variability of port demand from the cyclical component of traffic series by applying the Hodrick-Prescott filter. The results show that the inclusion of variability does not affect the efficiency measures, except in the case of containerised general cargo. Moreover, we demonstrate that port authorities have excess capacity and their resources are misallocated. Finally we establish that the allocative inefficiency of Spanish port authorities is difficult to resolve given the limited substitution possibilities among the different pairs of inputs.

Suggested Citation

  • Hidalgo, Soraya & Núñez-Sánchez, Ramón, 2012. "Estimating allocative efficiency in port authorities with demand uncertainty," MPRA Paper 38136, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:38136
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    File URL: https://mpra.ub.uni-muenchen.de/38136/1/MPRA_paper_38136.pdf
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    References listed on IDEAS

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    1. Fare, Rolf & Grosskopf, Shawna, 1990. "A distance function approach to price efficiency," Journal of Public Economics, Elsevier, vol. 43(1), pages 123-126, October.
    2. Atkinson, Scott E & Cornwell, Christopher, 1994. "Parametric Estimation of Technical and Allocative Inefficiency with Panel Data," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 35(1), pages 231-243, February.
    3. Rodriguez-Alvarez, Ana & Tovar, Beatriz & Trujillo, Lourdes, 2007. "Firm and time varying technical and allocative efficiency: An application to port cargo handling firms," International Journal of Production Economics, Elsevier, vol. 109(1-2), pages 149-161, September.
    4. Backus, David K & Kehoe, Patrick J, 1992. "International Evidence of the Historical Properties of Business Cycles," American Economic Review, American Economic Association, vol. 82(4), pages 864-888, September.
    5. González, MarI´a Manuela & Trujillo, Lourdes, 2008. "Reforms and infrastructure efficiency in Spain's container ports," Transportation Research Part A: Policy and Practice, Elsevier, vol. 42(1), pages 243-257, January.
    6. Ana Rodríguez-Álvarez & Beatriz Tovar & Alan Wall, 2011. "The Effect of Demand Uncertainty on Port Terminal Costs," Journal of Transport Economics and Policy, University of Bath, vol. 45(2), pages 303-328, May.
    7. Pablo Coto-Millan & Jose Banos-Pino & Ana Rodriguez-Alvarez, 2000. "Economic efficiency in Spanish ports: some empirical evidence," Maritime Policy & Management, Taylor & Francis Journals, vol. 27(2), pages 169-174, April.
    8. Gaynor, Martin & Anderson, Gerard F., 1995. "Uncertain demand, the structure of hospital costs, and the cost of empty hospital beds," Journal of Health Economics, Elsevier, vol. 14(3), pages 291-317, August.
    9. Baltagi, Badi H & Griffin, James M, 1988. "A General Index of Technical Change," Journal of Political Economy, University of Chicago Press, vol. 96(1), pages 20-41, February.
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    Cited by:

    1. Antonio Affuso & Cataldo Ferrarese & Guido Nannariello, 2013. "Spending Review: un’analisi di efficienza delle Capitanerie di porto," SCIENZE REGIONALI, FrancoAngeli Editore, vol. 2013(3), pages 111-143.
    2. repec:pal:marecl:v:19:y:2017:i:3:d:10.1057_mel.2015.33 is not listed on IDEAS

    More about this item

    Keywords

    allocative efficiency; distance function; demand variability; Hodrick-Prescott filter; ports;

    JEL classification:

    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • R53 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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