Present study is an attempt to estimate the level of economic efficiency and benchmarking various States of India who are significantly contributing in Indian Industrial Economy by using Input-Oriented CRS Model of DEA by developing an efficiency frontier through optimizing the weighted output to input ratios of each contributory units of the industry under the assumption that ratios can equal but not exceed unity for any one of the contributor. Besides, this paper presumes the importance of various years of production of cement across India and the combination of forces like demand for cement and installed capacity to generate outputs being measured in terms of actual production and capacity utilization during a period of over 20 years starting from 1991-92 though unconventional, Data Envelopment Analysis is conducted to scale Technical efficiency or inefficiency, per-say. To benchmark the performance of Indian industries during the study period, DEA has been employed where it fundamentally, takes into account the total input and total output of all Indian Industries as Decision Making Units (DMUs) to calculate technical efficiency (TE). TE is treated as an indicator of performance of DMUs and comparison has been made amongst them. The use of DEA to benchmark the years of technical efficiency with judiciously selected inputs and outputs mixes are applied to all India Industries. Input-oriented CRS Model is been used for DEA Econometric inferences. In the case of constant returns to scale, both orientations give close results. A separation into technical and scale efficiencies have been accomplished without altering latter conditions for use of DEA directly on observational data. This paper also takes an account of T.E of Indian Industries being categorized on different basses such as Employment, Capital invested etc.
{"title":"The Application of DEA for Econometric Inferences Towards the Efficiency & Benchmarking of Indian Industry and Inefficiency Estimation of Indian Cement Sector","authors":"A. Pandey","doi":"10.2139/ssrn.2485765","DOIUrl":"https://doi.org/10.2139/ssrn.2485765","url":null,"abstract":"Present study is an attempt to estimate the level of economic efficiency and benchmarking various States of India who are significantly contributing in Indian Industrial Economy by using Input-Oriented CRS Model of DEA by developing an efficiency frontier through optimizing the weighted output to input ratios of each contributory units of the industry under the assumption that ratios can equal but not exceed unity for any one of the contributor. Besides, this paper presumes the importance of various years of production of cement across India and the combination of forces like demand for cement and installed capacity to generate outputs being measured in terms of actual production and capacity utilization during a period of over 20 years starting from 1991-92 though unconventional, Data Envelopment Analysis is conducted to scale Technical efficiency or inefficiency, per-say. To benchmark the performance of Indian industries during the study period, DEA has been employed where it fundamentally, takes into account the total input and total output of all Indian Industries as Decision Making Units (DMUs) to calculate technical efficiency (TE). TE is treated as an indicator of performance of DMUs and comparison has been made amongst them. The use of DEA to benchmark the years of technical efficiency with judiciously selected inputs and outputs mixes are applied to all India Industries. Input-oriented CRS Model is been used for DEA Econometric inferences. In the case of constant returns to scale, both orientations give close results. A separation into technical and scale efficiencies have been accomplished without altering latter conditions for use of DEA directly on observational data. This paper also takes an account of T.E of Indian Industries being categorized on different basses such as Employment, Capital invested etc.","PeriodicalId":237187,"journal":{"name":"ERN: Production; Cost; Capital & Total Factor Productivity; Value Theory (Topic)","volume":"54 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-10-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124170549","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
G. Festel, Martin Würmseher, C. Rammer, E. Boles, M. Bellof
This paper presents the results of a calculation model for biofuel production costs in 2015 and 2020 based on raw material price projections and considering scale and learning effects. Distinguishing six types of biofuels, the paper finds that scale economies and learning effects are critical for 2nd generation biofuels to become competitive. In case these effects can be utilized, cost saving potentials for 2nd generation biofuels are significant.
{"title":"Modelling Production Cost Scenarios for Biofuels and Fossil Fuels in Europe","authors":"G. Festel, Martin Würmseher, C. Rammer, E. Boles, M. Bellof","doi":"10.2139/ssrn.2337990","DOIUrl":"https://doi.org/10.2139/ssrn.2337990","url":null,"abstract":"This paper presents the results of a calculation model for biofuel production costs in 2015 and 2020 based on raw material price projections and considering scale and learning effects. Distinguishing six types of biofuels, the paper finds that scale economies and learning effects are critical for 2nd generation biofuels to become competitive. In case these effects can be utilized, cost saving potentials for 2nd generation biofuels are significant.","PeriodicalId":237187,"journal":{"name":"ERN: Production; Cost; Capital & Total Factor Productivity; Value Theory (Topic)","volume":"15 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-09-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124198304","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We consider a cost sharing problem among agents on a line. The problem is closely related to the classic airport game, but in our model agents are characterized by their location, rather than their needed runway length. We characterize a family of cost allocation rules in which agents pay a share of the incremental costs as well as any debt from upstream agents, with the Bird rule (where agents pay their full incremental cost) and the ‘free rider’ rule (where the terminal agent pays everything) as the two extreme cases. We also extend the analysis to cost sharing among agents located on a fixed tree structure.
{"title":"Cost Sharing in Chains and Other Fixed Trees","authors":"J. Hougaard, M. Tvede, Lars Peter Østerdal","doi":"10.2139/ssrn.2323322","DOIUrl":"https://doi.org/10.2139/ssrn.2323322","url":null,"abstract":"We consider a cost sharing problem among agents on a line. The problem is closely related to the classic airport game, but in our model agents are characterized by their location, rather than their needed runway length. We characterize a family of cost allocation rules in which agents pay a share of the incremental costs as well as any debt from upstream agents, with the Bird rule (where agents pay their full incremental cost) and the ‘free rider’ rule (where the terminal agent pays everything) as the two extreme cases. We also extend the analysis to cost sharing among agents located on a fixed tree structure.","PeriodicalId":237187,"journal":{"name":"ERN: Production; Cost; Capital & Total Factor Productivity; Value Theory (Topic)","volume":"2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-09-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128104627","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
I am delighted and honoured to contribute an essay to the Special Issue of the Global and Local Economic Review in honour of Anwar Shaikh’s contributions, and especially to honour 40 years on from the publication of his wonderful HUMBUG article, “Laws of production and laws of algebra: the Humbug production function” in the February 1974 issue of The Review of Economics and Statistics.
{"title":"The Importance of HUMBUG in the Cambridge - Cambridge Controversies in Capital Theory","authors":"G. Harcourt","doi":"10.2139/SSRN.2315876","DOIUrl":"https://doi.org/10.2139/SSRN.2315876","url":null,"abstract":"I am delighted and honoured to contribute an essay to the Special Issue of the Global and Local Economic Review in honour of Anwar Shaikh’s contributions, and especially to honour 40 years on from the publication of his wonderful HUMBUG article, “Laws of production and laws of algebra: the Humbug production function” in the February 1974 issue of The Review of Economics and Statistics.","PeriodicalId":237187,"journal":{"name":"ERN: Production; Cost; Capital & Total Factor Productivity; Value Theory (Topic)","volume":"420 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122450406","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper discusses a new meta-DEA approach to solve the problem of choosing direction vectors when estimating the directional distance function. The proposed model emphasizes finding the “direction” for productivity improvement rather than estimating the “score” of efficiency; focusing on “planning” over “evaluation”. In fact, the direction towards marginal profit maximization implies a step-by-step improvement and “wait-and-see” decision process, which is more consistent with the practical decision-making process. An empirical study of U.S. coal-fired power plants operating in 2011 validates the proposed model. The results show that the efficiency measure using the proposed direction is consistent with all other indices with the exception of the direction towards the profit-maximized benchmark. We conclude that the marginal profit maximization is a useful guide for determining direction in the directional distance function.
{"title":"Meta-Data Envelopment Analysis: Finding a Direction Towards Marginal Profit Maximization","authors":"Chia-Yen Lee","doi":"10.2139/ssrn.2295739","DOIUrl":"https://doi.org/10.2139/ssrn.2295739","url":null,"abstract":"This paper discusses a new meta-DEA approach to solve the problem of choosing direction vectors when estimating the directional distance function. The proposed model emphasizes finding the “direction” for productivity improvement rather than estimating the “score” of efficiency; focusing on “planning” over “evaluation”. In fact, the direction towards marginal profit maximization implies a step-by-step improvement and “wait-and-see” decision process, which is more consistent with the practical decision-making process. An empirical study of U.S. coal-fired power plants operating in 2011 validates the proposed model. The results show that the efficiency measure using the proposed direction is consistent with all other indices with the exception of the direction towards the profit-maximized benchmark. We conclude that the marginal profit maximization is a useful guide for determining direction in the directional distance function.","PeriodicalId":237187,"journal":{"name":"ERN: Production; Cost; Capital & Total Factor Productivity; Value Theory (Topic)","volume":"4 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-07-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122067133","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Sraffa, in part 1 of his "Production of Commodities by Means of Commodities", describes two kinds of reductions to labor. First, he reduces Classical natural prices to an infinite series of "dated" quantities of labor multiplied by a profit factor. He concludes that prices are "in proportion to their labor cost", that is Classical labor-values, only in the special case of zero profit. I show that Sraffa's reduction is incomplete in the precise sense that it ignores some actual labor supplied during the "successive stages of the production of the commodity". The complete reduction to dated quantities reveals that natural prices are, in fact, proportional to total labor costs. Second, Sraffa constructs a "standard commodity" that functions as an "invariable standard of value" in the context of changes in income distribution. Sraffa reduces the standard commodity, which he views as "a purely auxiliary construction", to the "variable quantity of labor" it commands in the market. I show that Sraffa's reduction is incomplete because it does not reduce the "invariable standard" to a real cost of production. The complete reduction reveals that Sraffa's "variable quantity" is, in fact, the total labor cost of the standard commodity. I conclude by discussing how Sraffa's incomplete reductions derive from the Classical category-mistake of conflating technical with total labor costs.
{"title":"Sraffa's Incomplete Reductions to Labor","authors":"Ian Wright","doi":"10.2139/ssrn.2294262","DOIUrl":"https://doi.org/10.2139/ssrn.2294262","url":null,"abstract":"Sraffa, in part 1 of his \"Production of Commodities by Means of Commodities\", describes two kinds of reductions to labor. First, he reduces Classical natural prices to an infinite series of \"dated\" quantities of labor multiplied by a profit factor. He concludes that prices are \"in proportion to their labor cost\", that is Classical labor-values, only in the special case of zero profit. I show that Sraffa's reduction is incomplete in the precise sense that it ignores some actual labor supplied during the \"successive stages of the production of the commodity\". The complete reduction to dated quantities reveals that natural prices are, in fact, proportional to total labor costs. Second, Sraffa constructs a \"standard commodity\" that functions as an \"invariable standard of value\" in the context of changes in income distribution. Sraffa reduces the standard commodity, which he views as \"a purely auxiliary construction\", to the \"variable quantity of labor\" it commands in the market. I show that Sraffa's reduction is incomplete because it does not reduce the \"invariable standard\" to a real cost of production. The complete reduction reveals that Sraffa's \"variable quantity\" is, in fact, the total labor cost of the standard commodity. I conclude by discussing how Sraffa's incomplete reductions derive from the Classical category-mistake of conflating technical with total labor costs.","PeriodicalId":237187,"journal":{"name":"ERN: Production; Cost; Capital & Total Factor Productivity; Value Theory (Topic)","volume":"438 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-07-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132208163","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The Australian financial sector has grown rapidly in recent decades and now looks big by global standards. The paper suggests that most of the growth has been driven by outward shifts in the demand for financial services driven by household preferences, by the availability of a wider range of financial tools, and by active government policy. Margins for many services have fallen sharply despite the increase in demand and most notably in areas where better technology has been brought to bear. Labour costs have risen but do not appear to have been a major driver.
{"title":"Is the Australian Financial Sector Too Big?","authors":"Rodney Maddock","doi":"10.2139/ssrn.2288949","DOIUrl":"https://doi.org/10.2139/ssrn.2288949","url":null,"abstract":"The Australian financial sector has grown rapidly in recent decades and now looks big by global standards. The paper suggests that most of the growth has been driven by outward shifts in the demand for financial services driven by household preferences, by the availability of a wider range of financial tools, and by active government policy. Margins for many services have fallen sharply despite the increase in demand and most notably in areas where better technology has been brought to bear. Labour costs have risen but do not appear to have been a major driver.","PeriodicalId":237187,"journal":{"name":"ERN: Production; Cost; Capital & Total Factor Productivity; Value Theory (Topic)","volume":"75 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115963892","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
I estimate a Solow model augmented with human capital in 42 countries for 1910–2000. Estimated TFP growth is 0.3%/year, and the steady-state rate for GDP/capita is 1.0%/year. Implicitly for high-income countries maintaining growth above this rate will be increasingly difficult.
{"title":"World Total Factor Productivity Growth and the Steady-State Rate in the 20th Century","authors":"T. Breton","doi":"10.2139/ssrn.2497078","DOIUrl":"https://doi.org/10.2139/ssrn.2497078","url":null,"abstract":"I estimate a Solow model augmented with human capital in 42 countries for 1910–2000. Estimated TFP growth is 0.3%/year, and the steady-state rate for GDP/capita is 1.0%/year. Implicitly for high-income countries maintaining growth above this rate will be increasingly difficult.","PeriodicalId":237187,"journal":{"name":"ERN: Production; Cost; Capital & Total Factor Productivity; Value Theory (Topic)","volume":"26 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-03-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124266849","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2013-02-24DOI: 10.1007/springerreference_6369
B. Malakooti
{"title":"Aggregate Planning","authors":"B. Malakooti","doi":"10.1007/springerreference_6369","DOIUrl":"https://doi.org/10.1007/springerreference_6369","url":null,"abstract":"","PeriodicalId":237187,"journal":{"name":"ERN: Production; Cost; Capital & Total Factor Productivity; Value Theory (Topic)","volume":"29 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-02-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115030035","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2013-02-18DOI: 10.5267/J.MSL.2013.01.020
P. Akbari, Ehsan Mohammadi
Productivity is a primary objective of increasing competition in modern economy and any increase in productivity level helps development of organization in the competitive market. The purpose of this paper is to investigate the relationship between operating leverage, financial leverage, compound leverage as independent variables and productivity indices including labor and capital productivities as dependent variables. The study includes 102 companies accepted in Tehran Stock Market based on screening, systematic deletion, over the period 2005-2010. The required data are gathered through official financial statements, committee reports, and other available documents in Tehran Stock Market. Stepwise regression and Pearson correlation are used to analyze the data. The results of the study have indicated that there were significant relationships between independent variables including leverage ratios with labor productivity. In addition, there is also a significance relationship between leverage ratios with capital productivity of total assets.
{"title":"A Study of the Impacts of Leverage on Labor and Capital Productivity: A Case Study of Companies Listed in Tehran Stock Market","authors":"P. Akbari, Ehsan Mohammadi","doi":"10.5267/J.MSL.2013.01.020","DOIUrl":"https://doi.org/10.5267/J.MSL.2013.01.020","url":null,"abstract":"Productivity is a primary objective of increasing competition in modern economy and any increase in productivity level helps development of organization in the competitive market. The purpose of this paper is to investigate the relationship between operating leverage, financial leverage, compound leverage as independent variables and productivity indices including labor and capital productivities as dependent variables. The study includes 102 companies accepted in Tehran Stock Market based on screening, systematic deletion, over the period 2005-2010. The required data are gathered through official financial statements, committee reports, and other available documents in Tehran Stock Market. Stepwise regression and Pearson correlation are used to analyze the data. The results of the study have indicated that there were significant relationships between independent variables including leverage ratios with labor productivity. In addition, there is also a significance relationship between leverage ratios with capital productivity of total assets.","PeriodicalId":237187,"journal":{"name":"ERN: Production; Cost; Capital & Total Factor Productivity; Value Theory (Topic)","volume":"2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-02-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130651586","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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