Springer Proceedings in Business and Economics

Springer Proceedings in Business and Economics

More information about this series at http://www.springer.com/series/11960

William H. Greene Lynda Khalaf Paul Makdissi Robin C. Sickles Michael Veall Marcel-Cristian Voia Editors Productivity and Inequality 123

Editors William H. Greene New York University New York, NY, USA Paul Makdissi University of Ottawa Ottawa, ON, Canada Michael Veall McMaster University Hamilton, ON, Canada Lynda Khalaf Carleton University Ottawa, ON, Canada Robin C. Sickles Rice University Houston, TX, USA Marcel-Cristian Voia Carleton University Ottawa, ON, Canada ISSN 2198-7246 ISSN 2198-7254 (electronic) Springer Proceedings in Business and Economics ISBN 978-3-319-68677-6 ISBN 978-3-319-68678-3 (ebook) https://doi.org/10.1007/978-3-319-68678-3 Library of Congress Control Number: 2017963543 Springer International Publishing AG 2018, corrected publication 2018 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Printed on acid-free paper This Springer imprint is published by Springer Nature The registered company is Springer International Publishing AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Introduction This book is the result of a selection of papers accepted at the North American Productivity Workshop (NAPW), which is a major biennial conference of researchers and practitioners on productivity and efficiency issues that is held every two years. NAPW IX was being held between June 15 and June 18, 2015, in Quebec City, and the theme of the conference was productivity and inequality. The 2016 conference included several keynote speeches by leading international productivity experts and presentations of specialized productivity-related research such as Susanto Basu, Professor of Economics (Boston College); Allan Collard- Wexler, Associate Professor of Economics (Duke University); Russell Davidson, Professor of Economics (McGill University); Erwin Diewert, Professor in the Vancouver School of Economics (University of British Columbia); Jonathan David Ostry, Deputy Director of the Research Department (IMF); Ariel Pakes, Thomas Professor of Economics (Harvard University); and Robin C. Sickles, Reginald Henry Hargrove Professor of Economics, Professor of Statistics (Rice University). Each plenary session allowed for the presentation of recent and ongoing research in the areas of productivity, inequality, efficiency, data envelopment analysis, and index number theory. The plenary sessions were organized to cover a broad range of productivity, inequality, and efficiency topics. Basu looked at the general topic of productivity and the welfare of nations; Collard-Wexler showed how to estimate production functions with measurement error in inputs; Diewert presented a decomposition of US business sector TFP growth into technical progress and inefficiency components; Davidson presented the challenges of making statistical inference with income distributions; Ostry discussed redistribution, inequality, and growth; Pakes looked at new entries and new markets; and Sickles discussed the sources of income inequality by exploring the role of productivity growth. The conference included many other researchers (150) from around the world (28 countries: Australia, Austria, Belgium, Brazil, Canada, China, Denmark, France, Germany, Greece, Hungary, Italy, Japan, Luxembourg, Macedonia, the Netherlands, Norway, Poland, Portugal, Romania, Russia, Spain, Sweden, Switzerland, Taiwan, Tunisia, the United Kingdom, and the United States), and the exposure of their research was a real gain for the Canadian community that works on issues of v

vi Introduction productivity and inequality. The conference was hosted by the Department of Economics of Carleton University and organized in collaboration with Industry Canada, Network to Study Productivity in Canada from a Firm-Level Perspective, the Centre for Monetary and Financial Economics, and Bank of Canada. The quality of the research papers presented at this conference attracted also representatives from Industry Canada, Bank of Canada, and Statistics Canada. Their participation was very important as the research ideas presented at the conference are very helpful for policy makers and can be used to formulate policies that can improve productivity performance of Canadian companies and, at the same time, can reduce inequality among Canadians.

Contents Estimating Efficiency in the Presence of Extreme Outliers: A Logistic-Half Normal Stochastic Frontier Model with Application to Highway Maintenance Costs in England... 1 Alexander D. Stead, Phill Wheat, and William H. Greene Alternative User Costs, Productivity and Inequality in US Business Sectors... 21 W. Erwin Diewert and Kevin J. Fox On the Allocation of Productivity Growth and the Determinants of U. S. Income Inequality... 71 Shasha Liu, Robin C. Sickles, and Shiyi Zhang Frontier Estimation of a Cost Function System Model with Local Least Squares: An Application to Dutch Secondary Education... 103 Jos L. T. Blank Aggregate Productivity and Productivity of the Aggregate: Connecting the Bottom-Up and Top-Down Approaches... 119 Bert M. Balk Confidence Sets for Inequality Measures: Fieller-Type Methods... 143 Jean-Marie Dufour, Emmanuel Flachaire, Lynda Khalaf, and Abdallah Zalghout Poverty-Dominant Marginal Transfer Reforms in Socially Risky Situations... 157 Paul Makdissi and Quentin Wodon Exploring the Covariance Term in the Olley-Pakes Productivity Decomposition... 169 Giannis Karagiannis and Suzanna M. Paleologou vii

viii Contents The Decline of Manufacturing in Canada: Resource Curse, Productivity Malaise or Natural Evolution?... 183 Robert Petrunia and Livio Di Matteo Flexible Functional Forms and Curvature Conditions: Parametric Productivity Estimation in Canadian and U.S. Manufacturing Industries... 203 Jakir Hussain and Jean-Thomas Bernard Productivity Growth, Poverty Reduction and Income Inequality: New Empirical Evidence... 229 Mahamat Hamit-Haggar and Malick Souare The Contribution of Productivity and Price Change to Farm-level Profitability: A Dual Approach Analysis of Crop Production in Norway... 255 Habtamu Alem Estimation of Health Care Demand and its Implication on Income Effects of Individuals... 275 Hossein Kavand and Marcel Voia Quantile DEA: Estimating qdea-alpha Efficiency Estimates with Conventional Linear Programming... 305 Joseph A. Atwood and Saleem Shaik Erratum... E1 Index... 327