Giannis Karagiannis

Parametric Decomposition of Output Growth Using A Stochastic Input Distance Function

This article proposes a tractable approach for analyzing the sources of TFP changes (i.e., technical change, changes in technical and allocative inefficiency, and the scale effect) in a multi-output setting, while retaining the single-equation nature of the econometric procedure used to estimate the parameters of the underlying technology. The proposed approach relies on Bauers cost function-based decomposition of TFP changes and the duality between input distance and cost functions. The empirical results are based on a sample of 121 UK livestock farms observed over the period 1983–92 and a translog input distance function. Copyright 2004, Oxford University Press.

Estimating theoretically consistent demand systems using cointegration techniques with application to Greek food data

Abstract The use of time-series techniques (cointegration and error correction models) has been offered as a potentially promising way in estimating demand systems that resolve the perennial issue of violating the theoretical postulates of homogeneity and symmetry. The empirical results of this paper, based on linearized AIDS and Greek food data, indicate that sample size, aggregation schemes and model specification seem to be important factors in the estimation of a theoretically consistent demand system. They also show that homogeneity is sensitive to sample size, while symmetry is sensitive to the aggregation scheme adopted.

Variable Elasticity of Substitution and Economic Growth: Theory and Evidence

We construct a one-sector growth model where the technology is described by a Variable Elasticity of Substitution (VES) production function. This framework allows the elasticity of factor substitution to interact with the level of economic development. First, we show that the model can exhibit unbounded endogenous growth despite the absence of exogenous technical change and the presence of non-reproducible factors. Second, we provide some empirical estimates of the elasticity of substitution, using a panel of 82 countries over a 28-year period, which admit the possibility of a VES aggregate production function with an elasticity of substitution that is greater than one and consequently of unbounded endogenous growth.

The elasticity of substitution as an engine of growth

This paper characterizes the elasticity of factor substitution in one-sector convex growth models with a general production function. It shows that an elasticity of substitution that is asymptotically greater than one is a sufficient (but not a necessary) condition for the existence of a lower bound on the marginal product of capital, which in turn can lead to unbounded endogenous growth. Hence, an elasticity of substitution that becomes eventually greater than one can counteract the role of diminishing returns to capital. This renders factor substitution a powerful engine of growth.

Measuring Irrigation Water Efficiency with a Stochastic Production Frontier: An Application to Greek Out-of-Season Vegetable Cultivation

Irrigation water is becoming an increasingly scarce resource for the agricultural sector in many regions and countries. A common ground in past policy schemes was the development of adequate irrigation infrastructure to guarantee the supply of irrigation water as the demand for agricultural products was increasing. However, these expansionary policies have resulted in a massive use of irrigation water at a heavily subsidized cost and physical scarcity. Water scarcity has become an increasing social and economic concern for policy makers and competitive water users. Particularly, agriculture is becoming the sector to which policy makers are pointing out at the core of the water problem.

Separating Technical Change from Time-Varying Technical Inefficiency in the Absence of Distributional Assumptions

This paper proposes an alternative model for separating technical change from time-varying technical inefficiency. The proposed formulation uses the general index, developed by Baltagi and Griffin (1988), to model technical change in the production frontier function and a quadratic function of time, as in Cornwell, Schmidt and Sickles (1990), to capture the temporal pattern of technical inefficiency. In such a setting, all parameters associated with the rate of technical change and the temporal pattern of technical inefficiency are identified separately. Moreover, the proposed formulation is independent of any distributional assumption concerning the one-sided error term associated with technical inefficiency, and it can be estimated in a single stage with non-linear FGLS. Empirical results based on a translog production frontier, and estimates of technical inefficiency and technical change are presented for the UK dairy sector over the period 1982–1992.

Decomposition analysis of consumers' demand changes: an application to Greek consumption data

A decomposition analysis for consumer demand functions is developed. Changes in Marshallian demand or expenditure shares functions over time are decomposed into a total substitution effect, an income effect, and a habit effect. This framework is applied to post-war Greek consumption patterns through a habit persistence version of the Quadratic Almost Ideal Demand System (QUAIDS). It is found that for all commodity categories (i.e., food, beverages and tobacco, footwear and clothing, settling and housing, and others) the income effect was the main driving force in explaining changes in both quantity demanded and expenditure shares, followed by habit and total substitution effects.

SELF-DUAL STOCHASTIC PRODUCTION FRONTIERS AND DECOMPOSITION OF OUTPUT GROWTH: THE CASE OF OLIVE-GROWING FARMS IN GREECE

This paper provides a decomposition of output growth among olive-growing farms in Greece during the period 1987–1993 by integrating Bauers (1990) and Bravo-Ureta and Riegers (1991) approaches. The proposed methodology is based on the use of self-dual production frontier functions. Output growth is attributed to the size effect, technical change, changes in technical and input allocative inefficiency, and the scale effect. Empirical results indicate that the scale and the input allocative inefficiency effects, which were not taken into account in previous studies on output growth decomposition analysis, have caused a 7.3% slowdown and a 11.0% increase in output growth, respectively. Technical change was found to be the main source of TFP growth while both technical and input allocative inefficiency decreased over time. Still though, a 56.5% of output growth is attributed to input growth.

Total Factor Productivity Growth and Technical Change in a Profit Function Framework

This paper develops a framework for measuring and decomposing TFP changes, within the parametric approach, by using directly the estimated parameters of a profit function. Two alternative relationships are derived for measuring and decomposing TFP changes via a profit function based on two alternative definitions of the rate of technical change, i.e., input- and output-based. Initially a long-run equilibrium framework is assumed and then the analysis is extended to the case of temporary equilibrium. The latter framework is applied to US agriculture by estimating a translog profit function and analyzing TFP changes during the period 1948–1994.

Malmquist productivity index estimation with zero-value variables: The case of Greek prefectural training councils

Abstract The paper suggests a technique for the parametric estimation of the Malmquist productivity growth index when the dataset to be analyzed contains a considerable number of observations with zero values. A dummy variable technique suggested by Battese (J. Agric. Econom. 48 (1997) 250) is extended to a translog specification of the input distance function. Moreover, technical changes (TCs) are decomposed into neutral and biased components and the sources of total productivity growth are computed via formulae explicitly accounting for the discrete nature of the data. Our approach has been applied to the Greek prefectural training councils—a state extension system for the general public. Findings indicate a considerably negative productivity growth primarily attributable to regressive TC.