Constant Returns Research Articles

Measuring the effect of GST towards performances of Malaysian takaful operators

PurposeThe main purpose of this study is to evaluate the performance of takaful operators in Malaysia.Design/methodology/approachThe study applied the data envelopment analysis (DEA) technique and the ratio analysis, using secondary data available on Malaysian Takaful operators’ annual reports. The study period for the analysis ranged from 2013 to 2016.FindingsBased on both analyses, the performance of Takaful operators was affected due to the additional cost imposed by the goods and services tax (GST) implementation. Results showed a decline in average technical efficiency for takaful operators upon GST implementation.Research limitations/implicationsThe data were taken from the annual audited reports for selected firms that were available on the firm’s website only, which was limited. The data were taken till 2016, even though the GST is omitted from Malaysia on 1 June 2018. This study has applied Ratio analysis and DEA constant returns to scale (CRS) technique; the future study may adopt both DEA CRS and DEA carrying returns to scale model to evaluate along with other methods to identify the specific factors.Practical implicationsThese findings may associate policymakers in identifying the shortcomings of GST or new tax implementation in a new and emerging industry. So, the policymakers and central banks may adopt necessary initiatives to support the industry. Because the Malaysian government is trying to push the takaful industry along with Islamic banking and finance in the competitive market, takaful operators may be exempted from the current sales and service tax (SST). In addition, takaful operators may use these findings to enhance their operational activities efficiently to improve performance. This paper might help the researchers and practitioners to learn the impact of GST. Even though GST seems not relevant anymore as the government has replaced it with SST, the trick is still the same as it is a kind of tax or costs incurred by the Takaful operators in running their business. Takaful managers may identify their efficient level in managerial aspects as well as the optimal scale of resources by the findings of this study.Originality/valueTo the best of the authors’ knowledge, this research is original in terms of data that is gathered directly from the annual report of the company during the GST period.

Efficiency modeling, an important factor in the development of sheep and goat production in a semiarid region / Modelagem da eficiência, fator importante para o desenvolvimento da ovinocaprinocultura, dos produtores do Semiáridoc

The paper aims to use the Data Envelopment Analysis (DEA) approach to evaluate the performance of sheep and goat production systems in the semi-arid region in Brazil. By applying a questionnaire with 127 variables, we obtained information from 254 producers in the municipality of Tauá - CE, with the input variables number of sheep and number of cattle, and the output variable of revenues from animal production. The DEA model with constant returns to scale (RCE) and variable returns to scale (RVE) and were used. The average technical efficiency measures of RCE and RVE models were 9.72% and 23.65% for all farmers. Only two and eight producers obtained efficiency equal to one (maximum) in RCE and RVE, respectively. Most producers operate in terms of increasing returns, and are inefficient. That is, the vast majority of producers are working below the optimum scale, which leads to the exclusion of producers.

On Accumulation of the Budget Deficit: Spirit of MMT Through Mathematical Analysis

It is said that public finance must be balanced at least in the long run. According to the so-called MMT (Modern Money Theory or Modern Monetary Theory) approach, however, this is not true. It is often pointed out that MMT lacks the mathematical analysis used in ordinary economic discussions. The purpose of this paper is to present a brief theoretical and mathematical basis to the backbone of the MMT argument, while maintaining the basics of the neoclassical microeconomic framework, such as maximizing consumer utility through utility functions and budget constraints, and equilibrium between demand and supply of goods under perfect competition with constant returns to scale technology. Using a simple overlapping generations (OLG) model that includes economic growth due to technological progress, we present the following results. The budget deficit equals the increase in people's savings, and the accumulated budget deficit equals people's savings. The budget deficit is a cause and the savings is a consequence, not the other way around. Deficits are created by the government, which determines income, which determines savings. Deficits create savings, not savings finance deficits. Reducing the budget deficit will reduce savings, income, and consumption.

Productive Efficiency of the European Union Member Countries: An Economic Assessment in Post?Brexit Perspective

This study used a modified Cobb-Douglas production model to estimate and test production input co-efficient for Group 28 (including the U.K), Group 27 (excluding the U.K) and individual European Union member countries by using the data of 31 years from 1990 to 2020. Results indicate that the log-linear C-D production model fits the data very well in terms of capital, male and female labour force elasticities, measuring the return to scale, standard errors and economies of scale for Group as well as for individual member countries. Results showed EU 28, EU 27 and from the list of member countries only United Kingdom, Slovak Republic, Slovenia, Czech Republic, Malta, Cyprus, Poland, Hungary, Estonia, Finland, Germany and Netherland are on increasing return to scale, only France is a constant return to scale (as value 0.99, close to 1) and remaining countries are on decreasing return to scale. The study also finds that the United Kingdom as an individual performing increasing return to scale so U.K separation (Brexit) from EU will not harm the U.K and even EU itself, as EU is on increasing return to scale after including/excluding U.K. Study also finds that EU as a group of 27 member countries exhibits increasing return to scale, which is a symbol for overall EU growth and development and suggestion for East Asian and South Asian countries to make a trading bloc or union like European Union.

Environmental Regulation Modeled as a Public Input Proportional to Capital Investment

Abstract Public inputs, when referred to as unpaid factors, are included in production specifications characterized by constant returns to scale in all inputs. In equilibrium, the public input rent generated by this configuration must be allocated among firms based on some measure of productive activity. Herein, decentralized environmental regulation is modeled as a public input of the unpaid type. Environmental rent is then rationed to private firms in proportion to their capital investment. Results reveal that source based capital taxation will capture these environmental rents, however, will not yield efficiency in the devolved interjurisdictional framework. The capital tax must be complemented by benefit taxation in order to provide efficient local public expenditures and socially optimal levels of environmental quality. JEL classification numbers: H42, H54, H71. Keywords: Environmental federalism, Capital tax, Public inputs, Efficiency.

Carbon emission efficiency of thermal power generation in China: Empirical evidence from the micro-perspective of power plants

The power industry is the key to achieving the carbon peak and carbon neutrality goals. It is of great theoretical and practical significance to investigate the carbon emission efficiency (CEE) of thermal power generation from the micro-perspective of power plants. Using the data of China's 42 thermal power plants in 2020, this paper firstly constructs a multi-dimensional index evaluation system for CEE from the aspects of energy, economy, and environment, considering the actual operational characteristics of power generation enterprises. Specifically, the super-efficiency slack-based measure (SBM) model with undesirable outputs is applied to identify and distinguish the multiple efficient decision-making units. Then, this paper explores the efficiency improvement path of inefficient thermal power plants. The results show that most power plants show the increasing scale payoffs, while the other power plants present constant returns to scale. The distribution of power plants' CEE is polarized into two clusters, i.e., low-CEE group and high-CEE group. Besides, Southern China shows the highest CEE, while the least is recorded in Central China. The main reasons for the low CEE are the high redundancies in inputs, carbon emission intensity of power supply and heat supply. It is necessary to adjust the resource allocation and input-output structure according to the redundancy and deficiency rates. This study can provide managers with targeted policy guidance to improve the sustainable development of power enterprises.

Evaluation Method of English Learning Efficiency Based on Grey Management Analysis

In order to improve the evaluation methods of English teaching efficiency, improve the accuracy and operability of evaluation, this paper analyzes the basic characteristics of English teaching efficiency from the perspective of ecological classroom theory, and puts forward a formula to measure the efficiency of Ecological English teaching. On this basis, this paper discusses a new method to evaluate eco-English teaching efficiency from two levels of basic characteristics and overall structure and illustrates the intuitiveness and feasibility of this method through an example to enhance its application value and reference significance. For the evaluation of effective English learning process, this paper combines the principal component analysis method and data envelopment analysis method to establish an analysis model of the relative efficiency of effective English learning, including a constant return to scale model, variable return to scale model, and scale efficiency model, which provides a quantitative analysis basis for the evaluation of effective English learning process. In order to facilitate the analysis of the relationship between “input” and “output” in English learning, and facilitate the quantitative analysis of the relationship between strategy choice and achievement in English learning, so as to provide scientific reference for English teaching and research.

Technical efficiency, sensitivity analysis and economic assessment applying data envelopment analysis approach: A case study of date production in Khuzestan State of Iran

• More than 50% of the expenditures in date production are associated with labor costs. • Direct energy consumption (diesel fuel, irrigation, and labor) is higher in comparison to indirect energy. • Based on the constant return to scale, 10% of input energy can be stored by boosting the efficiency in date production gardens in Khuzestan province. • Based on date envelope analysis results, chemical fertilizers consumption and fuel expenditure will be much more declared alongside the other inputs by enhancing efficiencies of date gardens. Efficiency has become the basis for boosting the environmental satisfaction and economic performance of gardens. The major goal of this research is to optimize the date production process by minimizing the quantity of inputs in the process using parametric and non-parametric approaches, as well as to investigate the amount of energy consumption and economic indicators in the date palm production in Iran's Khuzestan region. For this purpose, data envelopment analysis (DEA: CRS & VRS and Anderson-Peterson) was used to optimize energy efficiency and present the ideal pattern of input consumption. Also, the transcendental production function was developed to represent the relationship between energy consumption and product performance. The outcomes revealed that the average entire energy expenditure in date palm production was 35.52 GJ ha −1 . Among inputs, irrigation, diesel and manure have contributed to the highest energy consumption and their contribution was calculated to be 43.92%, 32.86% and 9.49%, respectively. The average of energy ratio, energy productivity, energy intensity and net energy gain were equal to 3.66, 0.39 kg MJ −1 , 2.70 MJ kg −1 and 91290.66 MJ ha −1 , respectively. Moreover, direct and indirect energy, as well as renewable and non-renewable energy, were computed at 76.64%, 26.46%, 56.28%, and 43.72%, respectively. DEA approach showed that there is potential to prompt sustainability, and based on the constant return to scale 10.15% of input energy is able to be alleviated. The coefficient determination of the transcendental production function model was obtained as 0.92 and gross return, benefit-cost ratio, economic productivity, payback period, invest return rate, percentage of production at the break-even point and profit per kg were calculated as 3550.63 $ ha −1 , 0.44, 1.67, 2.23 year, 0.44, 2.26 and 0.26 $ kg −1 , respectively. To save energy, it is suggested that solar energy be used instead of diesel fuel to extract water, and that simultaneous cultivation be implemented to limit the usage of chemical fertilizers.

Love Child's Hotbed of Occasional Poetry: Poems & Artifacts

Love Child's Hotbed of Occasional Poetry: Poems & Artifacts

Involuntary Unemployment Under Ongoing Nominal Wage Rate Decline in Overlapping Generations Model

Abstract We analyze involuntary unemployment based on consumers’ utility maximization and firms’ profit maximization behavior with ongoing nominal wage rate decline. We consider a three-periods overlapping generations (OLG) model with a childhood period as well as younger and older periods under monopolistic competition with increasing, decreasing or constant returns to scale technology. When there exists involuntary unemploymnet, the nominal wage rate may decline. We examine the existenbce of involuntary unemployment in that model with ongoing mominal wage rate decline (or deflation). Even if the nominal wage rate declines, we have a steady state with involuntary unemployment and constant output and employment. We need budget deficit or budget surplus to maintain the steady state depending on whether real balance effect is positive or negative. Also we examine the possibility to achieve full-employment by fiscal policy.

“The Most Important Writer for Me”: Lydia Ginzburg on Marcel Proust

Marcel Proust's “In Search of Lost Time” had a very significant and lasting influence on both the thinking and the artistic practice of Lydia Ginzburg. It is no coincidence that the legend of her attempt to write a “Proustian” novel proved so enduring. No less important to her was the very problem of the “big text,” the duration created by the narrative's duration. However, Proust's “removal” of the problem of the “fictitiousness” and “fiction” of the novel narrative — the possibility of viewing Proust's novel simultaneously in the context of both fiction and the documentary narrative — is the main one. If in the late 1920s, her reaction to Proust's novel was connected mainly with questions of applicability, assimilation of Proust's techniques and principles of work construction. From the turn of the 20th–30th, her understanding is linked to the experience of the Proust novel not only as new but also as making possible what was already impossible in the framework of previous literature, a way of modelling the self. In this essay, we limit ourselves to one aspect of the enormous theme of Proust and Ginzburg, namely, to determine what Ginzburg saw as the main content and significance of Proust as a writer-what determined the constant return of her thought to his novel. In our view, in Proust's artistic practice, Ginzburg sees realized the primary purpose of literature: the interpretation of “human experience, social and mental,” in finding that sphere where “now” the connection of words and things is possible, i.e. where literature can find reality.

Technical Efficiency, Productivity, and Determinants of Technical Inefficiency of Local Hospitals in Oman: Using Data Envelopment Analysis

Purpose of the study: Evidence suggested that inefficiency is a significant problem for many health systems around the world and, in particular, in developing countries. Oman's health system increasingly faces critical resource constraints to deliver the same or better health services. Better utilization of hospital resources will enable more services to be provided and allow the redistribution of potential resources to ensure equity, accessibility, and the delivery of sustainable quality care. Therefore, this study aims to assess the technical efficiency, productivity, and determinates of technical inefficiency of local hospitals in Oman. Methodology: Input-oriented Data Envelopment Analysis (DEA) approach was used to assess the technical efficiency of 29 local hospitals in Oman under constant return to Scale (CRS), variable returns to scale (VRS) and scale efficiency (SE) using 2018 data. Tobit model was used to assess the determinants of hospital inefficiency. The DEA based Malmquist Productivity Index (MPI) was applied to the panel data to measure the Total Factor Productivity Change (TFPCH) between 2015 and 2018. The STATA IC 16 software was used to conduct this evaluation. Main Findings: 75.8% of local hospitals were technically efficient under VRS and SE assumptions, and 79.3% achieved technical efficiency under CRS assumption. The average technical efficiency score under CRS, VRS and SE were 96%, 97% and 99%, respectively. Tobit's model suggested that the number of physicians and pharmacists negatively correlated with the VRS score at p level < 0.05 and < 0.01, respectively. Furthermore, the Tobit model suggested that the number of outpatient’s visits positively correlated with the VRS efficiency score at p level < 0.01. Local hospitals showed a productivity growth by 18.1% during 2015-2018, mainly attributed to the increase in technological change by 42.6%. Research Implications: The results suggested that one-quarter of local hospitals in Oman were technically inefficient. This study identifies opportunities for improving local hospital performance through efficient utilization of health resources and proper redistribution of human resources. The novelty of the study: This is the first study to assess the technical efficiency, productivity, and determinants of technical inefficiency of local hospitals in Oman. It is hoped that the findings of this study can inform decision-makers to tailor their policies towards better and more efficient utilization of the existing resources.

Productividad total de los factores de las regiones de México: 1993-2018

The Mexican economy has moved to an outward growth model that has resulted in a spatial restructuring of manufacturing activities. This transformation has allowed the incorporation of the regional economy, in which the local and the global interact to promote the expansion and well-being of the localities. The general objective of this paper is to describe the performance of manufacturing in Mexico through its regional composition based on total factor productivity (TFP) in the period 1993-2018. The applied methodology is the Solow Residual model with a Cobb-Douglas production function with constant marginal returns to analyze the sources of growth. The results show regional asymmetries in TFP growth, on the one hand, the northern border and central-north regions register significant growth and, on the other, the central and southern regions have lagged due to inefficient performance that has resulted in a limited productivity performance of Mexican manufactures.

Analisis Faktor-Faktor yang Memengaruhi Produksi Lada di Provinsi Lampung

Indonesia is a country that is famous as a producer of spices. The most widely produced type of pepper in Indonesia is black pepper from Lampung or Lampung Black Pepper. This study aimed to describe the characteristics of farmers and pepper farming in Lampung Province and analyze the factors that influence pepper productivity in Lampung Province. Based on the available data, the characteristics of farmers that can be used to assess the managerial ability of farmers are the level of education, age of farmers, control of assets and production facilities, and farming methods. The dependent variable (Y) in the study is Pepper Productivity, and the independent variables are land area, fertilizer, plant age, labour, planting system dummy, and the main seed variety used dummy. The variables in this study were modelled with the Cobb-Douglas production function. The farming scale of Lampung Pepper farmers is in a constant return to scale condition with a production elasticity value of Ep = 1.06, which means that the proportion of additional production inputs will result in additional production in the same proportion. The results showed that area, age of planting, and labour are statistically significant variables affecting pepper productivity at a significant level of 10%.

Economics and Resource Use Efficiency of Wheat Crop: Findings from Jammu Region of Jammu & Kashmir

Economics of wheat crop revealed that, the cost-benefit ratio was found out to be highest in case of Jammu district and the least in case of Udhampur district. The overall yield of the wheat crop worked out to be 5.92, highest yield found out to be in the Jammu district and lowest in the Rajouri district. Production function analysis revealed that wheat crop yielded constant returns to scale. In addition, variables like human labour, machine labour, fertiliser, manure, etc. proved to be positively significant that could influence the yields of the wheat crop. Except Udhampur district, mustard crop in the rest of the district experienced constant returns to scale. Moreover, variables like machine labour, manure and fertiliser worked out to be significant. On the other hand, in the Udhampur district, rice crop revealed the increasing returns to scale and the rest of the districts showed the constant returns to scale. Human labour, plant protection chemicals and manure came out to be significant. Therefore, such input variables need to be taken care of accordingly.

Generalised commensurability properties of efficiency measures: Implications for productivity indicators

We analyse the role of new weak and strong commensurability conditions on efficiency measures and especially on productivity measurement. If strong commensurability fails, then a productivity index (indicator) may exhibit a homogeneity bias yielding inconsistent and contradictory results. In particular, we show that the Luenberger productivity indicator is sensitive to proportional changes in the input-output quantities, while the Malmquist productivity index is not affected by such changes. This is due to the homogeneity degree of the directional distance function under constant returns to scale. In particular, the directional distance function only satisfies the weak commensurability axiom in general. However, if the directional distance function is a diagonally homogeneous function of the technology, then the directional distance function satisfies strong commensurability. This explains why the direction of an arithmetic mean of the observed data works well. Numerical examples and an empirical illustration are proposed. Under a translation homothetic technology, the Luenberger productivity indicator is not affected by any additive directional transformation of the observations.

An estimation of macroeconomic energy rebound, intensity, and output effect: An evidence from Pakistan

The outcomes of energy efficiency are conditional on the size of energy rebound effect, which further promotes energy consumption instead of reducing it. Therefore, evaluating the energy rebound effect is a crucial constituent for environmental sustainability. In that perspective, the present paper examines macroeconomic rebound, intensity, and output effects of exogenous energy efficiency improvements for Pakistan using time series data from 1980 to 2018. For this, constant elasticity of substitution (CES) production function is estimated with two non-linear estimation techniques Nelder and Mead (NM) and Broyden Fletcher Goldfarb Shanno (BFGS). Moreover, three effects of energy efficiency are calculated for long run and short run with both constant returns to scale and variable returns to scale. The study finds about 65% partial energy rebound effect in both cases of NM method while BFGS method provides partial rebound effect (27%) in case of constant returns to scale and backfire (136%) in case of variable returns to scale. Moreover, the magnitudes of three effects in the long run are relatively high as compared to the short run effects. As anticipated, energy efficiency is relatively less effective; therefore, energy and environment policies should incorporate the energy rebound effect to achieve a sustainable economic growth path.

Measuring and Decomposing Productivity of Co-operatives in Aceh, Indonesia

This study empirically assesses the co-operatives' productivity across 23 districts/cities in Aceh province, Indonesia, over 2014-2018 using the Malmquist Total Factor of Productivity Index (MTFPI) based on Data Envelopment Analysis (DEA). Unlike previous studies that focused only on selected sectors and industries, this study examines the co-operative productivity of all industries and sectors within one province. Overall, this study recorded a low productivity level of co-operatives. Only co-operatives in Subulussalam City consistently experienced a fully productive using both Constant Return to Scale (CRS) and Variable Return to Scale (VRS) estimations. Meanwhile, based on the VRS estimation, the study found that the co-operatives in Aceh Besar and Aceh Utara's districts had experienced total productivity. Overall, the co-operatives' productivity level has slightly declined, contributed mainly by a decline in technical efficiency. However, the co-operatives' efficiency level has increased, mainly due to their scale efficiency improvement. The findings suggested the importance of implementing sound co-operative governance principles and enhancing technical efficiency by adopting e-marketing and the internet of things in their business activities.How to Cite:Majid, M.S.A., Faisal, F., Fahlevi, H., & Azhari, A. (2022). Measuring and Decomposing Productivity of Co-operatives in Aceh, Indonesia. Etikonomi, 21(1), 55-66. https://doi.org/10.15408/etk.v21i1.21299.

Constant Returns to Scale with Pollution Modeled as an Unpaid Factor

If pollution emissions enter a constant returns to scale production function, the additional output generated by this unpaid factor cannot be an equilibrium phenomenon. Private factors will engage in rent seeking without some form of rationing. Herein, we propose a shared rationing mechanism and investigate the efficiency implications in a setting of devolved decision making. General equilibrium derived optimal conditions show that taxing capital alone will not provide the revenue for efficient local public good levels. Suboptimal public goods provision then leads to inefficient environmental quality. Interestingly, larger shares of emission rents rationed to mobile capital result in environmental competition becoming more fierce. Conversely, when large shares of rent are captured by locally owned fixed-factors, competition for mobile capital is subdued.

The diagonal approach: A theoretic framework for the economic evaluation of vertical and horizontal interventions in healthcare

The diagonal approach is a health system funding concept wherein vertical approaches targeting specific diseases are combined with horizontal approaches intended to strengthen health systems broadly. This taxonomy can also be used to classify health system interventions as either vertical or horizontal. Previous studies have used mathematical programming to evaluate horizontal interventions, but these models have not allowed concurrent evaluation of different types of horizontal interventions or captured spillovers and intertemporal effects. This paper aims to develop a theoretic framework for the diagonal approach. The framework is articulated through integer programming, maximizing health benefits given constraints by identifying the optimal set of both vertical and horizontal interventions to fund.The theoretic framework for the diagonal approach is developed by synthesizing and expanding three prior works. The decision problem is synthesised to allow concurrent evaluation of three different types of horizontal interventions, those: (i) improving health system efficiency, (ii) improving capacity, and (iii) investing in new platforms. Linear programs are converted to integer form, relaxing previous assumptions related to constant returns to scale and divisibility of interventions. The framework is expanded to evaluate multiple budget constraints and options for new platforms. A new form for the value function is used to estimate the benefits of intervention combinations, capturing spillovers between vertical and horizontal interventions and dynamic returns to scale. The decision problem is specified inferotemporally, explicitly capturing the impact of the time horizon on the optimal choice set. Dynamic examples are provided to demonstrate the advantages of the diagonal approach over prior frameworks.This framework extends existing works, enabling simultaneous comparison of various combinations of both vertical and horizontal interventions, capturing spillovers and intertemporal effects. The diagonal approach framework defines decision problems flexibly and realistically, forming the basis for future applied work. Implementation would improve resource allocation and patient health outcomes.