Advances in Efficiency and Productivity Analysis

Contents
Editors' Introduction
	1 Measurement
	2 Econometrics
	3 Applications
	References
The Difference Approach to Productivity Measurement and Exact Indicators
	1 Introduction
	2 The First Order Approximation Approach
	3 Decomposing the Theoretical Indicators of Overall Output Price and Input Quantity Change into Individual Price and Quantity Indicators
	4 The Problem of Adjusting the Measures for General Inflation
	5 The Difference Approach to Productivity Measurement Using the Nonparametric Cost Constrained Value Added Function
	6 An Exact Indicator Approach to the Decomposition of Value Added Change
	7 Conclusion
	References
Efficiency Driven Socio-Technical System Design
	1 Introduction and Context
		1.1 Systems and System Design
		1.2 Socio-Technical Systems and Complexity
		1.3 Trans-disciplinary, Multi-disciplinary, and Inter-disciplinary Research
		1.4 Application Research and Application Issues
	2 Efficiency Measurement and Socio-Technical System Design
	3 Efficiency Driven Socio-Technical System Design: Five Illustrations
		3.1 Social Service Provision: The American Red Cross (Medina-Borja et al. 2007; Medina-Borja and Triantis 2011; ARC Grant)
			3.1.1 Societal/Socio-Technical System Need
			3.1.2 Research Constraints/Considerations
			3.1.3 Stakeholders
			3.1.4 Approach
			3.1.5 Synergies and Learning from Other Projects
			3.1.6 Feedback to Theory/Open Modeling Issues
			3.1.7 Societal/Socio-Technical System Impact
		3.2 Traffic Congestion: The Downtown Space Reservation System (Zhao et al. 2010a, b, 2011; NSF Grant # 0527252)
			3.2.1 Societal/Socio-Technical System Need
			3.2.2 Research Constraints/Considerations
			3.2.3 Stakeholders
			3.2.4 Approach
			3.2.5 Synergies and Learning from Other Projects
			3.2.6 Feedback to Theory/Open Modeling Issues
			3.2.7 Societal/Socio-Technical System Impact
		3.3 Asset Management: Highway Maintenance (Fallah-Fini et al. 2010, 2012, 2014, 2017; NSF Grant # 0726789)
			3.3.1 Societal/Socio-Technical System Need
			3.3.2 Research Constraints/Considerations
			3.3.3 Stakeholders
			3.3.4 Approach
			3.3.5 Synergies and Learning from Other Projects
			3.3.6 Feedback to Theory/Open Modeling Issues
			3.3.7 Societal/Socio-Technical System Impact
		3.4 Disaster Management: Evacuation Planning (Herrera-Restrepo et al. 2016; NSF Grant # 1536808 (Ongoing))
			3.4.1 Societal/Socio-Technical System Need
			3.4.2 Research Constraints/Considerations
			3.4.3 Stakeholders
			3.4.4 Approach
			3.4.5 Synergies and Learning from Other Projects
			3.4.6 Feedback to Theory/Open Modeling Issues
			3.4.7 Societal/Socio-Technical System Impact
		3.5 Supervision of Autonomous Systems: Railway Traffic Control Centers (Topcu et al. 2019) (Ongoing)
			3.5.1 Societal/Socio-Technical System Need
			3.5.2 Research Constraints/Considerations
			3.5.3 Stakeholders
			3.5.4 Approach
			3.5.5 Synergies and Learning from Other Projects
			3.5.6 Feedback to Theory/Open Modeling Issues
			3.5.7 Societal/Socio-Technical System Impact
	4 Complex Adaptive Systems and Efficiency Measurement
	5 Conclusions and Future Directions
	References
A Framework for the Assessment and Consolidation of Productivity Stylized Facts
	1 Introduction
		1.1 Stylized Facts and Productivity/Efficiency Stylized Facts
		1.2 Productivity and Efficiency Measurement
		1.3 Main Aim and Organization of the Paper
	2 The Need for a Framework to Assess Productivity
		2.1 Developing Models
		2.2 The Implementation Problem
	3 A Doubly Conditional Performance Model
	4 The Representation of the Production Process
	5 Behavioral Economics and Behavioral Model Building
	6 The Accumulation of Productivity Stylized Facts
	7 A Unifying Leading-Thread for Different Streams of Literature
		7.1 Evolutionary Theory of the Firm
		7.2 X-Inefficiency and Resource-Based View of the Firm
		7.3 Economic Theory, Complementarity, and Innovation in Production
		7.4 Comparative Institutional Analysis
		7.5 Design of Evaluation and Control Systems
		7.6 Varieties of Governance
	References
Water's Contribution to Agricultural Productivity over Space
	1 Introduction to the Theoretical Framework
	2 Model Specification
		2.1 Spatial Optimization Problem
		2.2 Contribution of Agricultural Water to Total Factor Productivity
	3 Accounting for Water Quality Adjustments over Space
	4 Discussion and Further Remarks
		4.1 Irrigation Efficiency, Technical Efficiency, and Water Productivity
		4.2 Future Outlook
	5 Conclusion
	References
A Survey of the Use of Copulas in Stochastic Frontier Models
	1 Introduction
	2 Copula Basics
	3 Allowing Dependence Between Noise and Inefficiency
	4 Allowing Dependence Between Different Composed Errors or Composed Errors and Other Errors
		4.1 Panel Data
		4.2 Correlation of Errors Across Equations
	5 Copulas Designed to Handle Specific Non-Standard Types of Dependence
	6 Choosing the Copula
		6.1 Information Criteria
		6.2 Goodness-of-Fit Tests
	7 Concluding Remarks
	References
Does Xistence of Inefficiency Matter to a Neoclassical Xorcist? Some Econometric Issues in Panel Stochastic Frontier Models
	1 Introduction
	2 Model Specification
		2.1 The Model with Firm Effects and iid Transient Inefficiency
			2.1.1 Random Firm Effects
			2.1.2 Fixed Firm Effects
		2.2 The Model with Determinants of Inefficiency and Firm Effects
			2.2.1 Random Firm Effects
			2.2.2 Fixed Firm Effects
		2.3 The Model with iid Persistent and Transient Inefficiency and Firm Effects
			2.3.1 Random Firm Effects
			2.3.2 Fixed Firm Effects
		2.4 The Model with Determinants of Persistent and Transient Inefficiency and Firm Effects
			2.4.1 Random Firm Effects
			2.4.2 Fixed Firm Effects
	3 Estimation
		3.1 Models with Determinants of Inefficiency and Firm Effects
			3.1.1 Fixed Firm Effects
			3.1.2 Random Firm Effects
		3.2 Models with Determinants of Persistent and Transient Inefficiency and Firm Effects
			3.2.1 Fixed Firm Effects
			3.2.2 Random Firm Effects
	4 Monte Carlo Simulations
		4.1 Specific Equation
		4.2 Estimation and Results
		4.3 State-of-the-art Methods
	5 Conclusion
	References
The Two-Tier Stochastic Frontier Framework (2TSF): Measuring Frontiers Wherever They May Exist
	1 Introduction
	2 Roads Taken: Applications of the 2TSF Framework
		2.1 Labor Market
		2.2 Health Services Market
		2.3 A Lot of Other Markets (And Not Only Markets)
		2.4 The DEA Connection
	3 Structural Foundations
		3.1 The “Incomplete Information” Framework of Polachek and Yoon (1987)
		3.2 The “Reservation Price” Framework of Gaynor and Polachek (1994)
		3.3 The “Hedonic Price” Framework of Kumbhakar and Parmeter (2010)
		3.4 The Nash Bargaining 2TSF Framework
	4 Tools of the Trade
		4.1 Distributional Specifications
			4.1.1 The Exponential 2TSF Specification
			4.1.2 The Half-Normal 2TSF Specification
			4.1.3 The Truncated Normal 2TSF Specification
			4.1.4 The Semi-Gamma 2TSF Specification
			4.1.5 The Generalized Exponential 2TSF Specification
			4.1.6 Dependence Between the One-Sided Error Components: The 2TSF Correlated Exponential Specification
		4.2 Estimation Methods
			4.2.1 Maximum Likelihood
			4.2.2 Corrected OLS/Method of Moments.
			4.2.3 Non-linear Least Squares
		4.3 Panel Data
	5 Moving Forward
	References
Individual Efficient Frontiers in Performance Analysis
	1 Introduction
	2 Performance Analysis
		2.1 Economic Foundation
		2.2 Estimating Prices
		2.3 Return and Value Performance Scores
		2.4 Density Estimates of Profit and Return
			2.4.1 Multivariate Normal Distribution of Netput Vectors
			2.4.2 Kernel Density Estimate of ψ(κ;μ)
			2.4.3 Parametric Distribution of Netput Vectors
		2.5 Price Computations
	3 Conventional DEA Based Methods
	4 Comparison of PA and EA Methods
	5 Conclusions
	References
DEA Models Without Inputs or Outputs: A Tour de Force
	1 Introduction
	2 Models Presentation and Uses
	3 Relations with Other Models
	4 Some Extensions
		4.1 Weak Disposability and Non-isotonic Indicators
		4.2 Intra- and Inter-Group BoD Models
		4.3 Average Cross Efficiency in the BoD Model
	5 Aggregation Across DMUs
	6 Productivity Analysis
	7 Concluding Remarks
	References
U.S. Banking in the Post-Crisis Era: New Results from New Methods
	1 Introduction
	2 The Statistical Model
	3 Estimation and Inference
	4 Data and Variable Specification
	5 Empirical Results
	6 Summary and Conclusions
	Appendix: Technical Details
	References
Room to Move: Why Some Industries Drive the Trade-Specialization Nexus and Others Do Not
	1 Introduction
	2 Methodology
		2.1 Empirical Framework
		2.2 Identification
			2.2.1 Benefits of a Three-Dimensional Panel
			2.2.2 Alternative Measures to Control for Endogeneity
	3 Data
	4 Results
		4.1 The Potential for Reallocation and Subsequent Actual Reallocation
		4.2 How Has the Potential for Reallocation Driven the Trade-Specialization Nexus?
		4.3 Can We Explain the Slow-Down in Specialization?
		4.4 Actual and Predicted Industry Shares
	5 Conclusion
	Appendix
		Construction of Alternative Measures for Trade Openness
			Industry-Level Natural Openness
			Industry-Level Trade Integration
		A Stochastic Frontier Production Model
		Data and Variables
			The AMADEUS Database
			Sample Selection
			Variable Definitions
		Robustness Checks
	References
Expansionary Investment Activities: Assessing Equipment and Buildings in Productivity
	1 Introduction
	2 Theoretical Grounding
	3 Data Description
		3.1 Identifying Investment Spikes
		3.2 Identifying Firm Scale, Productivity, and Efficiency
	4 Methodology
	5 Empirical Results
		5.1 Changes in Scale: Production and Employment
		5.2 Change of Average Wage and Capital Intensity
		5.3 Changes in Firm Productivity and Efficiency
	6 Industry Cluster Decomposition
	7 Conclusion
	Appendix 1: Construction of Capital Stock Variables
	Appendix 2: Available upon Request: Derivation of Investment Model
	References
Applying Statistical Methods to Compare Frontiers: Are Organic Dairy Farms Better Than the Conventional?
	1 Introduction
	2 Methodology
		2.1 Statistical Inference of the Malmquist Index and Its Components
	3 Danish Dairy Farms
	4 Results
		4.1 Frontier Differences
		4.2 Mix Differences
		4.3 Permutation Tests for Productivity Change and Its Components
	5 Final Remarks
	References
Nutrient Use and Precision Agriculture in Corn Productionin the USA
	1 Introduction
	2 Description of Precision Agricultural Technologies
		2.1 Data Sources and Variable Construction
	3 Input Distance Function Model
		3.1 Metaproduction Technology
	4 Econometric Estimation and Results
	5 Summary of Results and Conclusion
	References
Index