Measuring productivity growth under factor non-substitution: An application to US steam-electric power generation utilities

M. Genius, S.E. Stefanou, V. Tzouvelekas

Research output: Contribution to journalArticleAcademicpeer-review

6 Citations (Scopus)

Abstract

A theoretical framework is developed for decomposing partial factor productivity and measuring technical inefficiency when the underlying technology is characterized by factor non-substitution. With Farrell’s (1957) radial index of technical inefficiency being inappropriate in this case, Russell non-radial indices are adapted to measure technical inefficiency in a Leontief-type model. A system of factor demand equations with a regime specific technical inefficiency term is proposed and estimated allowing for dependence across inputs using a copula approach. Then the paper presents a complete decomposition of partial factor productivity changes using a dataset of US steam-power electric generation utilities.
Original languageEnglish
Pages (from-to)844-852
JournalEuropean Journal of Operational Research
Volume220
Issue number3
DOIs
Publication statusPublished - 2012

Keywords

  • technical efficiency
  • united-states
  • model selection
  • industry
  • scale
  • inefficiency
  • economies
  • frontier
  • plants
  • cost

Fingerprint Dive into the research topics of 'Measuring productivity growth under factor non-substitution: An application to US steam-electric power generation utilities'. Together they form a unique fingerprint.

  • Cite this