Data/hora: 11/06/2024 10:58:47

Provedor de dados: | 31
País: | United States
Título: | Chasing Absolute Cost and Profit Savings in a World of Relative Inefficiency
Autores: | Atkinson,   Scott E.; Dorfman,   Jeffrey H.
Data: | 2006-05-22
Ano: | 2006
Palavras-chave: | Research Methods/ Statistical Methods.
Resumo: | Econometric models to estimate allocative and technical inefficiency include stochastic shadow distance frontiers, shadow  cost frontiers, and shadow profit frontiers. In these models, the cost savings from eliminating both sources of inefficiency is  often reported in total and then decomposed into the contribution of each source.  This paper shows that this calculation, as formalized in Kumbhakar (1997) and used extensively in empirical applications over the last 25 years, is non-unique without  additional information that is  typically not available. The same results are obtained for shadow profit and shadow distance systems. The decomposition of cost (profit) savings is underidentified, since it is conditional on the arbitrarily normalized value for one shadow input (input or output) price when the shadow cost (profit) system  is estimated. When the normalized value is rescaled, estimates of shadow costs will change by the scale factor, but the new model is observationally equivalent to the original one. We provide theoretical proofs and empirical examples of the restrictions (additional information) necessary to identify cost savings. Several methods of satisfying this decomposition requirement are discussed.
Tipo: | Conference Paper or Presentation
Idioma: | Inglês

Identificador:

21456

http://purl.umn.edu/21058

Editor: | AgEcon Search

Relação:

American Agricultural Economics Association&gt;2006 Annual meeting, July 23-26, Long Beach, CA

Selected Paper

Formato:

46

application/pdf