Kathy J. Hayes

Budget-Constrained Frontier Measures of Fiscal Equality and Efficiency in Schooling

Equality and efficiency are key issues in educational reform. Here the authors analyze the efficiency and equality consequences of various school finance reforms using a cost-indirect output distance function. This function readily models multiple-output production under conditions of budgetary constraint, and provides a natural measure of performance that is closely related to Farrell-type measures of efficiency. The analysis suggests that despite school district inefficiency, finance reforms can affect student achievement. However, any potential gains in output from redistribution are dwarfed by the potential gains from increased efficiency. More strikingly, the analysis demonstrates that budgetary reforms designed to equalize expenditures could actually increase the inequality of student achievement.

Economies of diversification in the banking industry : A frontier approach

Abstract This paper defines a new measure, economies of diversification, to examine the cost effect of product line expansion. This measure is a special case of expansion path subadditivity and contains economies of scope as a special case. A nonparametric frontier technique which isolates the effects of inefficiency and scale is used to measure economies of diversification. Applied to a set of 468 U.S. depository institutions operating in 1984, we find slight diseconomies of diversification. Diseconomies of diversification and inefficiency due to the overutilization of resources are found to be more important determinants of bank costs than is the failure to operate at optimal scale.

Gender differences in salary and promotion for faculty in the humanities, 1977–95

This study uses data from the Survey of Doctorate Recipients to evaluate gender differences in salaries and promotion for academics in the humanities. Differences in employment outcomes by gender are evaluated using three methods: the Oaxaca decomposition is used to examine salary differentials, and binary choice models and duration analysis are used to estimate the probability of promotion to tenure. Over time, gender salary differences can largely be explained by academic rank. Substantial gender differences in promotion to tenure exist after controlling for productivity and demographic characteristics. However, the authors observe a slight decline in the gender promotion gap for the most recent cohort evaluated. On the basis of this evidence, the authors conclude that gender discrimination for academics in the humanities tends to operate through differences in promotion, which in turn affects wages.

Output allocative and technical efficiency of banks

Abstract In this paper we calculate output allocative and technical efficiency for a sample of small banks operating in 1982. We do so by estimating a Shephard type output distance function as a deterministic frontier. In general we find that the banks in our sample are output inefficient.

The Relative Efficiency of City Manager and Mayor-Council Forms of Government

Most city governments are either of the strong mayor-council (MC) form or of the councilmanager (CM) type. A 1986 survey, as reported in the 1988 issue of the Municipal Year Book [14,8], indicates that 43.5 percent of cities had a mayor-council form, 53.5 percent had a city manager form, and the remaining 3 percent had a commission form of government. The government structure of MC cities consists of (1) an executive branch with a popularly elected mayor who has the authority to hire and fire other city officials outside the merit system, and (2) a legislative branch in a relatively small city council with 5 to 9 members. The government structure of CM cities is similar to private businesses in that voters, council, and the city manager play the roles of stockholders, board of directors, and chief executive officer, respectively. CM cities also maintain relatively small councils which hire and fire the city manager who is professionally trained and has direct authority over other city employees. The mayor in CM cities is selected either by the council or directly by voters to serve only as a ceremonial officer. The CM form is an institutional guarantee against a possible stalemate between the executive and legislative branches of government. In this paper we study whether or not the CM form is more efficient than the MC form of government in formulating and implementing public policies. The literature on the relative superiority of a city manager form of government is inconclusive. One might hypothesize that a city manager has incentives similar to those of the manager of a profit maximizing firm and this should lead to higher relative efficiency and lower costs than a mayor-council form of government. The city manager has an incentive to lower costs and increase productivity to ensure his job security. Although the mayor under the MC form of government also has an incentive to reduce costs and increase productivity, the mayor is accountable directly to the public unlike the city manager who is accountable to the city council. The city council as

The demand for good government

The efficiency of governments may be influenced by institutional factors and by the intensity of monitoring by citizens. This paper develops a theory of optimal monitoring and then uses frontier estimation techniques to construct measures of efficiency f or police departments in 141 cities. Using these efficiency measures, i t is possible to test the extent to which efficiency is influenced by the presence of a professional city manager and by characteristics of th e citizens. Copyright 1993 by MIT Press.

Is Airline Price Dispersion the Result of Careful Planning or Competitive Forces

We develop a model of price dispersion to distinguish the impact of price discrimination from that of peak load pricing schemes or atypical competition resulting from the financial difficulties of the early 1990s. By utilizing three alternative measures of dispersion and appealing to economic theory for our specification, we find robust results suggesting an estrangement between price dispersion and price discrimination. While some discrimination continues to persist at monopolized endpoints, most dispersion is associated with fare wars and peak load pricing schemes.

Cross Country Comparisons

In a recent paper, Hayes, Molina and Slottje (1988) examined the question of preference variation across North America. As the economy of the United States becomes a more open economy and less immune to fluctuations in international markets, the impact of relative price changes of foreign commodities on domestic economic well-being will be of increasing interest. Earlier studies have focused on the welfare impact of foreign price changes (cf Thursby (1981)). In this chapter, potential secondary utility effects of foreign prices are examined, the chapter follows Hayes, Molina and Slottje (1988).

Fiscal stress and the production of public safety: A distance function approach

Abstract Faced with increasing crime rates, but nonincreasing budgets, local governments are seeking cost saving means of providing public safety. This paper investigates a bureaucracys response to fiscal stress as well as its ability to efficiently substitute civilian for uniformed personnel. Exploiting duality theory, a distance function is used to model technology, retrieve information concerning substitutability and shadow prices of personnel, and test for cost minimization. Morishima elasticities are adopted to allow for asymmetry in substitution between types of personnel. It is found that the more adverse the public safety environment and budgetary condition, the more efficiently resources are allocated.

Occupational segregation in the multidimensional case Decomposition and tests of significance

A new multidimensional version of the G-segregation index is developed and applied to the study of occupational segregation. U.S. Current Population Survey data are used to measure the difference in occupational segregation between races as well as the change between time periods. Decomposition of the difference (change) into ‘occupation mix’ and ‘gender composition’ components indicates the contribution of each factor. Because these inequality measures are computed from sample data, distributional information required to test hypotheses is lacking. Two computer-intensive methods for estimating the distributional properties are demonstrated. The approximate randomization and bootstrap methodologies are used to test for statistically significant differences in segregation between races and for changes over time. In addition, the components of the decomposition are examined for statistical significance.