David K. Lambert

Ownership and sources of inefficiency in the provision of water services

The relative efficiency of service provision by publicly versus privately owned enterprises has been the subject of considerable theoretical debate and empirical investigation for at least the last hundred years. This research investigates the relative efficiencies of publicly versus privately owned water utilities. The publicly owned enterprises are found to be more efficient overall, as well as in the technical efficiency associated with the employment of labor, capital, energy, and material inputs. No significant differences are found in scale efficiencies between the two classes of enterprise. The greatest level of inefficiency results from the overuse of capital relative to the most efficient firms in the sample, while discrepancies in labor use was the least among the four inputs considered.

Risk Modeling Using Direct Solution of Nonlinear Approximations of the Utility Function

A risk model is developed which involves direct solution of the expected utility maximization problem utilizing nonlinear programming. The model permits the use of utility functions exhibiting increasing, constant, and decreasing absolute risk aversion. Demonstrations are done using functions exhibiting such properties over normal, uniform, and triangular data sets.

Factor Bias under Stochastic Technical Change

Time-series procedures are employed to determine the influence of technological change in inducing factor bias in U.S. agricultural production between 1948 and 1983. A dynamic measurement error model is used to link research expenditures to the unobserved technological change variable. Biasedness in labor and material factor shares is established.

Cost analysis of water utilities: A goodness-of-fit approach

The behavior of privately owned and publicly owned water utilities is examined by calculating the percentage difference between the observed cost and the optimum cost consistent with the Weak Axiom of Cost Minimization for each individual water utility. It allows for a comprehensive analysis of nearly optimizing behavior of economic units as opposed to the conventional analysis of exact optimizing behavior. The empirical results provide evidence that private water utilities are more efficient than public water utilities.

Uncertain Yields in Sectoral Welfare Analysis: An Application to Global Warming

Agriculture operates in an uncertain environment. Yields, prices, and resource usage can change dramatically from year to year. However, most analyses of the agricultural sector, at least those using mathematical programming methods, assume decision making is based on average yields, ignoring yield variability. This study examines how explicit consideration of stochastic yield outcomes influence a sector analysis. We develop a model that can be used for stochastic sector analysis. We extend the risk framework developed by Hazell and others to incorporate discrete yield outcomes as well as consumption activities dependent upon yield outcomes. An empirical application addresses a comparison between sector analysis with and without considerations of the economic effects of yield variability in a global warming context.

Valuing Varieties with Imperfect Output Quality Measurement

Markets for agricultural products may be inefficient when signals do not adequately reflect product characteristics important to market participants. Preferences can be explicitly reflected in price premiums for measurable characteristics using hedonic methods. However, when product quality information is costly to obtain, the problem is compounded. Bundling of quality traits by variety can serve to signal product quality. A procedure is developed to derive the value of different varieties in meeting buyer demands. An application to the hard red spring market wheat illustrates the use of a procedure to distinguish among varieties and provides empirical support for the existence of Akerlofs lemon market in the release of wheat varieties.

Measuring angling quality in count data models of recreational fishing

This paper develops a methodology for investigating different specifications of angling quality in recreational demand models. The methodology is used to compare three alternative specifications of the relationship between angling demand and site quality. The site quality alternatives include chemical concentrations, biological stress indices based on the chemicals, and catch per unit effort. The three alternatives are differentiated using a likelihood ratio non-nested testing procedure.

The Impacts of Farm Financial Structure on Production Efficiency

Farm financial structure may affect both short- and long-run input usage, thereby affecting farm efficiency. Any inefficiencies arising from the choice of inputs can be magnified over time as credit constraints continue to affect input usage. In a panel of 54 North Dakota crop farms, efficiency and debt structure were related. Intermediate debt was found to be positively related to farm technical efficiency, and short-term debt was negatively associated with technical efficiency. Use of intermediate-term debt was positively associated with farm-scale efficiency, whereas no significant relationship was found between short- and long-term debt and scale efficiency.

Technological Change In Meat And Poultry-Packing And Processing

Nonparametric procedures are used to compare technological change in SIC 2011, meatpacking, and SIC 2015, poultry slaughter and processing. There has been a greater increase in total factor productivity in poultry than in the red meats. Evidence also suggests recent differences in the bias of this technological change, with production changes being labor using in poultry and biased towards greater efficiency in the use of live animal inputs in meatpacking.

Dynamic Adjustment of U.S. Agriculture to Energy Price Changes

Energy prices increased significantly following the first energy price shock of 1973. Agricultural producers found few short run substitution possibilities as relative factor prices changed. Inelastic demands resulted in total expenditures on energy inputs that have closely followed energy price changes over time. A dynamic cost function model is estimated to derive short and long run adjustments within U.S. agriculture between 1948 and 2002 to changes in relative input prices. The objective is to measure the degree of farm responsiveness to energy price changes and if this responsiveness has changed over time. Findings support inelastic demands for all farm inputs. Statistical results support moderate increases in responses to energy and other input price changes in the 1980s. However, demands for all inputs remain inelastic in both the short and long run. Estimation of share equations associated with a dynamic cost function indicates that factor adjustment to input price changes are essentially complete within 1 year.