Economics of Wheat in Egypt

Este estudio pretende estimar la eficiencia y la productividad de las principales provincias de la producción de trigo en Egipto. Los datos utilizados en este estudio son datos de panel a nivel de provincias del período 1990-2012, obtenidos del Ministerio de Agricultura y Recuperación Tierras, y de la Agencia Central de Movilización Pública y Estadística, Egipto. Se aplica el enfoque de fronteras estocásticas para medir la eficiencia (función de producción de Cobb-Douglas) y se emplean las especificaciones de Battese y Coelli (1992) y (1995). También se utiliza el índice de Malmquist como una aproximación no paramétrica (Análisis de Envolvente de Datos) para descomponer la productividad total de los factores de las principales provincias productoras de trigo en Egipto en cambio técnico y cambio de eficiencia. El coeficiente de tierra es positivo y significativo en los dos especificaciones Battese y Coelli (1992) y (1995), lo que implica que aumentar la tierra para este cultivo aumentaría significativamente la producción de trigo. El coeficiente de trabajo es positivo y significativo en la especificación de Battese y Coelli (1992), mientras que es positivo y no significativo en la especificación de Battese y Coelli (1995). El coeficiente de la maquinaria es negativo y no significativo en las dos especificaciones de Battese y Coelli (1992) y (1995). El coeficiente de cambio técnico es positivo y no significativo en la especificación de Battese y Coelli (1992), mientras que es positiva y significativo en la especificación de Battese y Coelli (1995). Las variables de efectos del modelo de ineficiencia Battese y Coelli (1995) indican que no existe impacto de las diferentes provincias en la producción de trigo en Egipto; la ineficiencia técnica de la producción de trigo tendió a disminuir durante el período de estudio; y no hay ningún impacto de género en la producción de trigo en Egipto. Los niveles de eficiencia técnica varían entre las diferentes provincias para las especificaciones de Battese y Coelli (1992) y (1995); el nivel mínimo medio de eficiencia técnica es 91.61% en la provincia de Fayoum, mientras que el nivel máximo medio de la eficiencia técnica es 98.69% en la provincia de Dakahlia. La eficiencia técnica toma un valor medio de 95.37%, lo que implica poco potencial para mejorar la eficiencia de uso de recursos en la producción de trigo. La TFPCH de la producción de trigo en Egipto durante el período 1990-2012 tiene un valor menor que uno y muestra un declive. Esta disminución es debida más al componente de cambio técnico que al componente de cambio de eficiencia. La disminución de TFPCH mejora con el tiempo. La provincia de Menoufia tiene la menor disminución en TFPCH, 6.5%, mientras que dos provincias, Sharkia y Dakahlia, son las que más disminuyen en TFPCH, 13.1%, en cada uno de ellas. Menos disminución en TFPCH ocurre en el período 2009-2010, 0.3%, mientras que más disminución se produce en TFPCH en el período 1990-1991, 38.9%. La disminución de la PTF de la producción de trigo en Egipto se atribuye principalmente a la mala aplicación de la tecnología. ABSTRACT The objectives of this study are to estimate the efficiency and productivity of the main governorates of wheat production in Egypt. The data used in this study is a panel data at the governorates level, it represents the time period 1990-2012 and taken from the Ministry of Agriculture and Land Reclamation, and the Central Agency for Public Mobilization and Statistics, Egypt. We apply the stochastic frontier approach for efficiency measurement (Cobb-Douglas production function) and the specifications of Battese and Coelli (1992) and (1995) are employed. Also we use Malmquist TFP index as a non-parametric approach (DEA) to decompose total factor productivity of the main governorates of wheat production in Egypt into technical change and efficiency change. The coefficient of land is positive and significant at Battese and Coelli (1992) and (1995) specifications, implying that increasing the wheat area could significantly enhance the production of wheat. The coefficient of labor is positive and significant at Battese and Coelli (1992) specification, while it is positive and insignificant at Battese and Coelli (1995) specification. The coefficient of machinery is negative and insignificant at the specifications of Battese and Coelli (1992) and (1995). The technical change coefficient is positive and insignificant at Battese and Coelli (1992) specification, while it is positive and significant at Battese and Coelli (1995) specification. The variables of the inefficiency effect model indicate that there is no impact from the location of the different governorates on wheat production in Egypt, the technical inefficiency of wheat production tended to decrease through the period of study, and there is no impact from the gender on wheat production in Egypt. The levels of technical efficiency vary among the different governorates for the specifications of Battese and Coelli (1992) and (1995); the minimum mean level of technical efficiency is 91.61% at Fayoum governorate, while the maximum mean level of technical efficiency is 98.69% at Dakahlia governorate. The technical efficiency takes an average value of 95.37%, this implying that little potential exists to improve resource use efficiency in wheat production. The TFPCH of wheat production in Egypt during the time period 1990-2012 has a value less than one and shows a decline; this decline is due mainly to the technical change component than the efficiency change component. The decline in TFPCH is generally improves over time. Menoufia governorate has the least declining in TFPCH by 6.5%, while two governorates, Sharkia and Dakahlia have the most declining in TFPCH by 13.1% for each of them. The least declining in TFPCH occurred at the period 2009- 2010 by 0.3%, while the most declining in TFPCH occurred at the period 1990-1991 by 38.9%. The declining in TFP of wheat production in Egypt is attributed mainly to poor application of technology.

Measuring science: An exploration

This paper examines the available United States data on academic research and development (R&D) expenditures and the number of papers published and the number of citations to these papers as possible measures of “output” of this enterprise. We look at these numbers for science and engineering as a whole, for five selected major fields, and at the individual university field level. The published data in Science and Engineering Indicators imply sharply diminishing returns to academic R&D using published papers as an “output” measure. These data are quite problematic. Using a newer set of data on papers and citations, based on an “expanding” set of journals and the newly released Bureau of Economic Analysis R&D deflators, changes the picture drastically, eliminating the appearance of diminishing returns but raising the question of why the input prices of academic R&D are rising so much faster than either the gross domestic product deflator or the implicit R&D deflator in industry. A production function analysis of such data at the individual field level follows. It indicates significant diminishing returns to “own” R&D, with the R&D coefficients hovering around 0.5 for estimates with paper numbers as the dependent variable and around 0.6 if total citations are used as the dependent variable. When we substitute scientists and engineers in place of R&D as the right-hand side variables, the coefficient on papers rises from 0.5 to 0.8, and the coefficient on citations rises from 0.6 to 0.9, indicating systematic measurement problems with R&D as the sole input into the production of scientific output. But allowing for individual university field effects drives these numbers down significantly below unity. Because in the aggregate both paper numbers and citations are growing as fast or faster than R&D, this finding can be interpreted as leaving a major, yet unmeasured, role for the contribution of spillovers from other fields, other universities, and other countries.

Eficiencia en la distribución: una aplicación en el sector de agencias de viajes

El objetivo de este trabajo consiste en estimar la eficiencia productiva y de escala con la que operan los intermediarios del sector minorista español de distribución turístico. Adicionalmente, se pretende examinar los determinantes de la eficiencia en términos de la integración vertical, concentración horizontal, tamaño y resultados de las entidades. La metodología aplicada se apoya en diversas técnicas de medición de eficiencia (paramétrica de naturaleza estocástica y no paramétrica del Análisis Envolvente de Datos, DEA), así como en modelos tobit para conocer el impacto de los factores del mercado y de la empresa sobre los niveles de eficiencia. La aplicación empírica realizada en una muestra de 50 agencias de viaje de nuestro país evidencia, por un lado, unos elevados índices de ineficiencia técnica y de escala, destacando en el último caso los rendimientos decrecientes; y por otro, que el tamaño y el ROA son los factores determinante de la eficiencia de escala, mientras que la concentración del mercado explica la eficiencia técnica.

Effects of Economic Factors on Adoption of Robotics and Consequences of Automation for Productivity Growth of Dairy Farms. Factor Markets Working Paper No. 32, December 2012

In the long term, productivity and especially productivity growth are necessary conditions for the survival of a farm. This paper focuses on the technology choice of a dairy farm, i.e. the choice between a conventional and an automatic milking system. Its aim is to reveal the extent to which economic rationality explains investing in new technology. The adoption of robotics is further linked to farm productivity to show how capital-intensive technology has affected the overall productivity of milk production. The empirical analysis applies a probit model and an extended Cobb-Douglas-type production function to a Finnish farm-level dataset for the years 2000–10. The results show that very few economic factors on a dairy farm or in its economic environment can be identified to affect the switch to automatic milking. Existing machinery capital and investment allowances are among the significant factors. The results also indicate that the probability of investing in robotics responds elastically to a change in investment aids: an increase of 1% in aid would generate an increase of 2% in the probability of investing. Despite the presence of non-economic incentives, the switch to robotic milking is proven to promote productivity development on dairy farms. No productivity growth is observed on farms that keep conventional milking systems, whereas farms with robotic milking have a growth rate of 8.1% per year. The mean rate for farms that switch to robotic milking is 7.0% per year. The results show great progress in productivity growth, with the average of the sector at around 2% per year during the past two decades. In conclusion, investments in new technology as well as investment aids to boost investments are needed in low-productivity areas where investments in new technology still have great potential to increase productivity, and thus profitability and competitiveness, in the long run.

Identifying Factor Productivity from Micro-data: The case of EU agriculture. Factor Markets Working Paper No. 34, January 2013

The classical problem of agricultural productivity measurement has regained interest owing to recent price hikes in world food markets. At the same time, there is a new methodological debate on the appropriate identification strategies for addressing endogeneity and collinearity problems in production function estimation. We examine the plausibility of four established and innovative identification strategies for the case of agriculture and test a set of related estimators using farm-level panel datasets from seven EU countries. The newly suggested control function and dynamic panel approaches provide attractive conceptual improvements over the received ‘within’ and duality models. Even so, empirical implementation of the conceptual sophistications built into these estimators does not always live up to expectations. This is particularly true for the dynamic panel estimator, which mostly failed to identify reasonable elasticities for the (quasi-) fixed factors. Less demanding proxy approaches represent an interesting alternative for agricultural applications. In our EU sample, we find very low shadow prices for labour, land and fixed capital across countries. The production elasticity of materials is high, so improving the availability of working capital is the most promising way to increase agricultural productivity.

Drought policy: a graphical analysis

The standard approach to modelling production under uncertainty has relied on the concept of the stochastic production function. In the present paper, it is argued that a state-contingent production model is more flexible and realistic. The model is applied to the problem of drought policy.

Capital market equilibrium with moral hazard and flexible technology

(Magill, M., Quinzii, M., 2002. Capital market equilibrium with moral hazard. Journal of Mathematical Economics 38, 149-190) showed that, in a stockmarket economy with private information, the moral hazard problem may be resolved provided that a spanning overlap condition is satisfed. This result depends on the assumption that the technology is given by a stochastic production function with a single scalar input. The object of the present paper is to extend the analysis of Magill and Quinzii to the case of multiple inputs. We show that their main result extends to this general case if and only if, for each firm, the number of linearly independent combinations of securities having payoffs correlated with, but not dependent on, the firms output is equal to the number of degrees of freedom in the firm's production technology.

Why is economics not a complex systems science?

The article argues that economics will have to become a complex systems science before economists can comfortably incorporate institutionalist and evolutionary economics into mainstream theory. The article compares the complex adaptive system of John Foster with that of standard economic theory and illustrates the difference through an examination of familiar production function. The place of neoclassical, Keynesian economics in complex systems is considered. The article concludes that convincing, multiple models have been made possible by the increase in widely available computing power available.

Essays on Development Policy and the Political Economy of Conflict

Electoral Rules and Leader Selection: Experimental Evidence from Ugandan Community Groups. Despite a large body of work documenting how electoral systems affect policy outcomes, less is known about their impact on leader selection. We study this by comparing two types of participatory decision making in Ugandan community groups: (i) vote by secret ballot and (ii) open discussion with consensus. Random assignment allows us to estimate the causal impact of the rules on leader types and social service delivery. Vote groups are found to elect leaders more similar to the average member while discussion group leaders are positively selected on socio-economic characteristics. Further, dropout rates are significantly higher in discussion groups, particularly for poorer members. After 3.5 years, vote groups are larger in size and their members save less and get smaller loans. We conclude that the secret ballot vote creates more inclusive groups while open discussion groups favor the already economically successful. Preparing for Genocide: Community Meetings in Rwanda. How do political elites prepare the civilian population for participation in violent conflict? We empirically investigate this question using data from the Rwandan Genocide in 1994. Every Saturday before 1994, Rwandan villagers had to meet to work on community infrastructure. The practice was highly politicized and, according to anecdotal evidence, regularly used by the political elites for spreading propaganda in the years before the genocide. This paper presents the first quantitative evidence of this abuse of the community meetings. To establish causality, we exploit cross-sectional variation in meeting intensity induced by exogenous weather fluctuations. We find that an additional rainy Saturday resulted in a five percent lower civilian participation rate in genocide violence. Selection into Borrowing: Survey Evidence from Uganda. In this paper, I study how changes to the standard credit contract affect loan demand and selection into borrowing, using a representative sample of urban micro enterprises, most with no borrowing experience. Hypothetical loan demand questions are used to test whether firm owners respond to changes in loans' contractual terms and whether take-up varies by firms' risk type and other firm owner characteristics. The results indicate that contracts with lower interest rates and less stringent collateral requirements attract less risky borrowers, suggesting that there is scope for improvement of standard financial contract terms. Credit Contract Structure and Firm Growth: Evidence from a Randomized Control Trial. We study the effects of credit contract structure on firm outcomes among small and medium sized firms. A randomized control trial was carried out to distinguish between some of the key constraints to efficient credit use connected to the firms' business environment and production function, namely (i) backloaded returns (ii) uncertain returns and (iii) indivisible fixed costs. Each firm was followed for the 1-year loan cycle. We describe the experiment and present preliminary results from the first 754 out of 2,340 firms to have completed the loan cycle. Firms offered a grace period have higher profits and higher household income than firms receiving a rebate later on as well as the control group. They also increased the number of paid employees  and reduced the number of unpaid employees, an effect also found among firms that received a cash subsidy at the beginning of the loan cycle. We discuss potential mechanisms behind these effects.

The determinants of firms' performance:can finance constraints improve technical efficiency?

This paper analyses the mechanisms through which binding finance constraints can induce debt-constrained firms to improve technical efficiency to guarantee positive profits. This hypothesis is tested on a sample of firms belonging to the Italian manufacturing. Technical efficiency scores are computed by estimating parametric production frontiers using the one stage approach as in Battese and Coelli [Battese, G., Coelli, T., 1995. A model for technical efficiency effects in a stochastic frontier production function for panel data. Empirical Economics 20, 325-332]. The results support the hypothesis that a restriction in the availability of financial resources can affect positively efficiency. © 2004 Elsevier B.V. All rights reserved.

Productivity change using growth accounting and frontier-based approaches:evidence from a Monte Carlo analysis

This study presents some quantitative evidence from a number of simulation experiments on the accuracy of the productivitygrowth estimates derived from growthaccounting (GA) and frontier-based methods (namely data envelopment analysis-, corrected ordinary least squares-, and stochastic frontier analysis-based malmquist indices) under various conditions. These include the presence of technical inefficiency, measurement error, misspecification of the production function (for the GA and parametric approaches) and increased input and price volatility from one period to the next. The study finds that the frontier-based methods usually outperform GA, but the overall performance varies by experiment. Parametric approaches generally perform best when there is no functional form misspecification, but their accuracy greatly diminishes otherwise. The results also show that the deterministic approaches perform adequately even under conditions of (modest) measurement error and when measurement error becomes larger, the accuracy of all approaches (including stochastic approaches) deteriorates rapidly, to the point that their estimates could be considered unreliable for policy purposes.

Public sector efficiency, foreign aid and small island development states

This paper examines the efficiency of public sector expenditures and foreign aid at achieving social sector outcomes in Small Island Developing States (SIDS). Efficiency is estimated using a Stochastic Production Function (SPF) approach and panel data since 1990. A second stage of the analysis examines the determinants of efficiency. Results indicate that the efficiency of aid and public sectors at improving life expectancy has deteriorated during the 1990s but efficiency at improving school enrolments has increased. Higher levels of governance are associated with higher efficiency. There is also evidence to suggest that efficiency is lower in SIDS, as well as in Sub-Saharan Africa.

Trade marks and performance in UK firms:evidence of Schumpeterian competition through innovation

This paper uses novel data on trade mark activity of UK manufacturing and service sector firms to investigate whether trade marks improve the profitability and productivity of firms. We first analyse Tobin`s q, the ratio of stock market value to book value of tangible assets. We then investigate the relationship between trade mark activity and productivity, using a value added production function. Finally we examine interactions between firms IP activity, to explore creative destruction and growth via innovation. We find trade marks are positively related to both Tobin`s q and to productivity. Also in the short run greater IP activity by other firms in the industry reduces the value added of the firm, but this same competitive pressure has later benefits via productivity growth, also reflected in higher stock market value. This describes the Schumpeterian process of competition through innovation, restraining profit margins while increasing product variety and quality.

Measuring the impact of innovative human capital on small firms' propensity to innovate

The ability to identify and evaluate the competitive advantage of employees' transferable and innovative characteristics is of importance to firms and policymakers. This research extends the standard measure of human capital by developing a unique and far reaching concept of Innovative Human Capital and emphasises its effect on small firm innovation and hence growth (jobs, sales and productivity). This new Innovative Human Capital concept encapsulates four elements: education, training, willingness to change in the workplace and job satisfaction to overcome the limitations of measurements used previously. An augmented innovation production function is used to test the hypothesis that small firms who employ managers with Innovative Human Capital are more likely to innovate. There is evidence from the results that Innovative Human Capital may be more valuable to small firms (i.e. less than 50 employees) than larger-sized firms (i.e. more than 50 employees). The research expands innovation theory to include the concept of Innovative Human Capital as a competitive advantage and determinant of small firm innovation; and distinguishes Innovative Human Capital as a significant concept to consider when creating public support programmes for small firms.

Ütemvakság

A gazdaság növekedés felgyorsulása hosszú távon először szükségszerűen csak egy rövid helyreállítási perióduson keresztül valósulhat meg, amelynek során a növekedés ütemét a válságok miatt elmaradt vagy más okból elmulasztott növekedés pótlása gyorsítja fel. Ez azonban messze nem jelenti a hosszú távú növekedési ütem felgyorsulását. A jelenséget először Jánossy Ferenc írta le, akinek megállapításai ma is érvényesek: egy jelentős visszaesés, majd stagnálás után a növekedési ütem 2005 után visszaállt az 1980 óta kialakult 1,5 százalékos hosszú távú ütemre. A Jánossy-féle szakmastruktúra-tényező nem más, mint a tudástőke: a munkaképes lakosság személyes tudása, jártassága és motivációja. Ezek az összetevők egy újrafogalmazott termelési függvény emberi elemei számos új és már korábban is ismert tényező mellett. Az emberi erőforrások nyilvántartása nem kompetenciaalapú, és emiatt a hosszú távú növekedési ütem alacsony szintjét sem tudjuk megmagyarázni. A növekedési ütem ingadozásai mögött elsősorban gazdaságpolitikai hibákat, érdemeket keresünk, holott az emberi beruházások elégtelen szintje jelenti a problémát, amely a múlt örökségnek és a jelen terheinek súlya alatt nem oldódik meg automatikusan. A magyar gazdaság egy újabb helyreállítási periódus előtt áll, s a gazdasági átalakítás alapvető feladata a foglalkoztatható lakosság aktivizálása, enélkül minden növekedési gyorsulás csak átmeneti helyreállítási periódus marad. JEL kód: B23, C22, E01, O11. /===/ Acceleration of economic growth in the long term can primarily be achieved only through a short period of consolidation, in which the growth rate of growth by recession or made up for by growth potential neglected for other reasons. But this is far from equivalent to an acceleration of the long-term growth rate. The phenomenon was described first by Ferenc Jánossy, whose conclusions remain valid to this day: after a substantial slump and a period of stagnation, the growth rate recovered after 2005 the long-term rate of 1.5 per cent that had set in after 1980. Jánossy's trade structure factor amounts to capital in knowledge: the personal know-how, expertise and motivation of the able-bodied population. These factors are the human constituents of a newly formulated production function, along with numerous new and previously known factors. The registration of human resources is competence- based and so it cannot explain the low level of the long-term growth rate either. People tend primarily to see failures and achievements of economic policy behind the failures and achievements of economic policy, when the real problem is inadequate human investment, which will not resolve itself automatically under the weight of the past and present burdens. The Hungarian economy is on the brink of a new period of recovery, and the basic task of economic transformation is to activate the employable population, without which any acceleration of growth will amount only to a temporary period of recovery.