Ana Rodriguez-Alvarez

ECONOMIC EFFICIENCY IN SPANISH PORTS: SOME EMPIRICAL EVIDENCE

In this study, a stochastic frontier cost function is used to estimate the econmic efficiency of Spanish ports through panel data. The sample covers annual data of 27 Spanish ports from 1985–1989. By comparing a Cobb-Douglas function with a translog, it is found that the latter best represents the technology according to the data. Analysing the efficiency indices obtained, it is found that the relatively larger ports are more economically inefficient. Moreover, the presence of large scale economies has been detected, as well as a lack of technical progress for the period considered.

The allocative efficiency measure by means of a distance function: The case of Spanish public railways

This paper is an empirical application of the distance function to study the allocative efficiency of a regulated railway firm, RENFE, where the cost minimising hypothesis may be questioned. The distance function, which is the dual of the cost function, completely describes the technology and, like the cost function, it allows a multiproduct analysis. However, unlike the cost function, the input prices are not needed for its calculation and it does not imply cost minimisation. We have obtained the shadow prices of the productive factors, which satisfy the condition of minimum cost. These shadow prices are used to calculate the degree of allocative inefficiency of the firm and the origin of this inefficiency by using a parametric correction of prices (kij). The procedure followed has consisted of estimating a system of equations for the input distance function and cost share equations, employing the iterative seemingly unrelated regressions method (ITSUR). Moreover, in contrast with other studies which have used this method, we assume that the employment of an input in a proportion different from that which would minimise cost could be systematic, and incorporate this possibility into our empirical model. The model was estimated using annual data over the period 1955-95. In order to achieve a distribution and the confidence intervals of the proportionality terms estimated, kij, we have used a standard bootstrap technique.

The effects of stochastic demand and expense preference behaviour on public hospital costs and excess capacity

The literature to date on the effect of demand uncertainty on public hospital costs and excess capacity has not taken into account the role of expense preference behaviour. Similarly, the research on expense preference behaviour has not taken demand uncertainty into account. In this paper, we argue that both demand uncertainty and expense preference behaviour may affect public hospital costs and excess capacity and that ignoring either of these effects may lead to biased parameter estimates and misleading inference. To show this, we extend the analysis of Rodríguez-Alvarez and Lovell (Health Econ. 2004; 13: 157-169) by incorporating demand uncertainty into the technology to account for the hospital activity of providing standby capacity or insurance against the unexpected demand. We find that demand uncertainty in Spanish public hospitals affects hospital production decisions and increases costs. Our results also show that overcapitalization in these hospitals can be explained by hospitals providing insurance demand when faced with demand uncertainty. We also find evidence of expense preference behaviour. We conclude that both stochastic demand and expense preference behaviour should be taken into account when analysing hospital costs and production.

Impacto en Asturias de las urgencias de atención primaria sobre las hospitalarias: un análisis de cointegración de series temporales

Fundamentos: La mayor accesibilidad a los puntos de atencion continuada (PAC) de la atencion primaria podria disminuir las visitas en los Servicios de Urgencias Hospitalarias (SUH). En este estudio se analiza si existe sustituibilidad entre las urgencias de Atencion Primaria y Hospitalaria. Metodos: Se analiza la totalidad de las visitas urgentes (n=6.454.034) realizadas en los SUH de los hospitales y PAC de Atencion Primaria de Asturias y de cada una de las areas sanitarias entre 1994 y 2001. Se construyeron las series temporales con frecuencias mensuales para Asturias y cada una de las areas y se realizo un analisis de cointegracion para evaluar si existe sustituibilidad entre ambas series. Resultados: Se observo un incremento medio anual de las urgencias totales en Asturias del 6,2% (PAC: 7,8%; SUH: 5,1%), con diferente crecimiento entre las areas sanitarias. En el analisis de cointegracion de las series temporales no se detecto sustituibilidad entre las urgencias de atencion primaria y hospitalaria para Asturias y para las areas sanitarias, salvo en el area sanitaria de Oviedo, donde una tasa de crecimiento del 10% en primaria reduciria un 2,7% las urgencias hospitalarias. Conclusiones: La mayor accesibilidad a los PAC de Atencion Primaria incrementa su utilizacion sin reducir las visitas en los SUH. En consecuencia, el incremento de recursos en Atencion Primaria no parece constituir una alternativa eficaz para disminuir las visitas en los SUH.

From European to Asian leadership in the economic efficiency of the world air industry.

This article sets out to compare the economic efficiency (EE) and decomposing of the changes in productivity of international air transport companies, during the period of 1996–2000. In these years, competition has been increased with the low-cost carriers and changes in Asian markets. Our purpose is to prove if these kinds of changes have damaged the EE of European and American companies compared with Asian carriers, and if Asian carriers are the new leaders in the air transport market. A stochastic frontier is estimated for cost function. From these estimations, we obtain indices for EE. For measuring productivity change, we use Malmquist indexes. They are computed using nonparametric programming techniques and we decompose them into technical and efficiency change. Our evidence suggests that the benefits of increasing competition in terms of EE and productivity are large for the Asian companies.

Analysing wage differentials when workers maximize the return to human capital investment

ABSTRACT The analysis of the determinants of differences in wages across workers has traditionally relied on the estimation of average earnings functions. In this article, we propose a new theoretical model where it is the workers who decide the amount they wish to invest in human capital, taking into account the costs of acquiring those skills, for the purpose of maximizing earnings. In this model, both human capital and marginal productivity are likely to be influenced by the individual’s (unobserved) characteristics such as ability or motivation, potentially giving rise to endogeneity problems. In this context, the empirical implementation of our theoretical model allows us, under certain assumptions, to obtain consistent estimates even under the assumption of endogeneity. We present an empirical application to the education sector using data from the Spanish Structure of Earnings Survey 2010. Our results show that females and workers in the private education sector face more difficulties in achieving their maximum potential wage.

CHANGES IN THE WORLD AIR INDUSTRY: AN ANALYSIS OF TECHNICAL EFFICIENCY

This article reports on a study that compares technical efficiency in a sample of 19 international airline companies (1992-2000), focusing on changes in technical efficiency that may have occurred as a result of the restructuring of the industry after liberalization (deregulation and privatization) in air transport. The authors first review the methodology used to make the estimations (based on the stochastic model of Battese and Coelli, 1995), then describe the variables and data found. The authors then discuss economic specifications and the functional forms chosen, outline the results of the estimation, and discuss their conclusions. The results show that there has been an improvement in efficiency during the study period. American and Asian companies are found to be most efficient, along with some European countries such as Lufthansa. The authors caution that there are still some markets which are operated under regulatory regimes; in Europe, there are also companies with public ownership.

Reserve capacity of public and private hospitals in response to demand uncertainty.

A feature of hospitals is that they face uncertain demand for the services they offer. To cover fluctuations in demand, they need to maintain reserve service capacity in the form of beds, equipment, personnel, etc. to minimize the probability of excess queuing or turning away patients, creating a trade-off between reserve service capacity and economic costs. Using a simple theoretical framework, we show how the reserve capacity established depends on institutional characteristics that can affect the objective of the hospital. In particular, we show that private and public hospitals may provide different levels of reserve capacity. In an empirical application using a panel data set of Spanish hospitals over the period 1996-2006, we model reserve service capacity using a distance frontier approach. Our results show that private hospitals generally react to a lesser extent to demand uncertainty than public hospitals.

The impact of health on wages: evidence for Europe

This paper analyses the effects of health on wages in sixteen European countries using production frontier methodology. It is assumed that workers have a potential income/productivity which basically depends on their human capital, but due to several health problems, situations could exist where workers fail to reach their potential income frontier. The estimation of a true-random-effects model allows us to conclude that the potential hourly wage of workers is significantly influenced by their level of education and their job experience. However, health problems, especially those strongly influencing work activities, contribute towards an individual not attaining the potential income which would otherwise be guaranteed by their human capital endowment. Suffering a strong limitation reduces gross wage per hour by 6.1%. This wage reduction is also observed in the case of a weak limitation, but here the wage difference with respect to workers without any limitation is 2.6%. Additionally, other factors, such as being a woman, the economic cycle or having a temporary contract, appear to distance an individual from their wage frontier.

Making a distinction between the effect of initial stock and investment in health determinants

The objective of this paper was to propose a health production model that distinguishes between the initial stock of health determinants and the subsequent investment in them, with a view to providing information to policy-makers regarding the effects of determinant-aimed policies. In this sense, the main contributions of the paper stem from the development of a theoretical and empirical model that distinguishes between the effect of the initial stock and that of investment in health determinants. To do this, we estimated the health production function using a stochastic frontier model. We present an empirical example using data for the years 2002 and 2008. The results support our decision to analyse the effects of the initial values attributable to health determinants separately from those arising following investment in the period. Concretely, we find significant differences for the determinants EMPLOY, SOCIALCLASS and NON-DRINKER. The results seem to indicate that, for variables labelled with the behavioural aspects of health such as NON-DRINKER, the effect over time of a change in investment in health is significantly greater than that resulting from a variation in initial values. In contrast, for socioeconomic variables such as SOCIAL CLASS or EMPLOY, for which effects on health tend to be more long-term in nature, the opposite occurs, with the effect of the investment during the time period proving significantly lower than the effect of the initial provision.