Marginal Product Research Articles

Surface Water Price to Improve Caisim Farming Efficiency in Tabanan Regency, Indonesia

Objective of this research is to analyze the price of surface water at the South Yeh Panan Dam in an effort to increase the efficiency of caisim farming in Tabanan Regency. Subak Bengkel is the largest subak in Kediri District, Tabanan Regency with an area of 329 Ha. In addition to planting rice, farmers in Subak Bengkel also plant other commodities, namely caisim with an average planting area of 40 Ha/season). The method used in research on surface water price analysis at the South Yeh Panan Dam in an effort to increase the efficiency of lowland caisim farming in Tabanan Regency is value of marginal product analysis. Data analysis with regression using the SPSS 22 software program, the regression coefficient value (b) will be obtained.i) of each input factor which also shows the magnitude of the elasticity value. The price of water in Subak Bengkel based on Value of Marginal Product (VMP) analysis is IDR. 1,438,164.62/ha/season or IDR 30,402.80/m3/season. This price is a contribution given by water resources to the production of caisim farming in Subak Bengkel so that farmers need to utilize water resources that have been given free by nature efficiently and wisely. Farmers are expected to utilize water resources that have been given freely by nature efficiently and wisely.

Non-Myopic Beam Scheduling for Multiple Smart-Target Tracking in Phased Array Radar Networks.

This paper addresses beam scheduling for tracking multiple smart targets in phased array radar networks, aiming to mitigate the performance degradation in previous myopic scheduling methods and enhance the tracking performance, which is measured by a discounted cost objective related to the tracking error covariance (TEC) of the targets. The scheduling problem is formulated as a restless multi-armed bandit problem, where each bandit process is associated with a target and its TEC states evolve with different transition rules for different actions, i.e., either the target is tracked or not. However, non-linear measurement functions necessitate the inclusion of dynamic state information for updating future multi-step TEC states. To compute the marginal productivity (MP) index, the unscented sampling method is employed to predict dynamic and TEC states. Consequently, an unscented sampling-based MP (US-MP) index policy is proposed for selecting targets to track at each time step, which can be applicable to large networks with a realistic number of targets. Numerical evidence presents that the bandit model with the scalar Kalman filter satisfies sufficient conditions for indexability based upon partial conservation laws and extensive simulations validate the effectiveness of the proposed US-MP policy in practical scenarios with TEC states.

Productivity and Wages in South Africa

The world has experienced rapid productivity growth in the last three decades, but has this growth reflected in wages? In theory, under certain conditions, workers earn their marginal product so that productivity growth feeds into wages on a one-to-one basis. Given the contradictory literature, this paper revisited the productivity–wage relationship in South Africa using an industry-level panel dataset comprising 74 industries observed between 1993 and 2023. Using several estimators, four main findings are observed. First, productivity is found to have grown faster than wages. Second, the observed productivity–wage divergence partly reflects the squeezing of workers for profits. Third, productivity growth mostly outpaced the wages of low-skilled workers, workers on short-term contracts, and informal workers. Fourth, productivity growth largely undermined take-home pay compared to fringe benefits. These results imply that although boosting productivity growth may be important, its achievement may not lead to broad-based wage gains in South Africa unless the government pursues policies that realign productivity and the pay of low-skilled workers, informal workers, and workers on short-term contracts. Such policies may include sector-based incentives for businesses that improve wage conditions, increased union support in high-growth industries, improved regulation of the informal sector, and vocational training for low-skilled workers.

The Analysis of Determinants of Production and Optimization of Garlic Farming in Sembalun District East Lombok Regency

Each farming aims to maximize farming income but is constrained by the quantity of inputs. The limited quantity of input is faced by farmers who cultivate garlic plants. One solution is to utilize production inputs available at the location where farmers live, such as organic fertilizers, to reduce the use of inorganic fertilizers. The purpose of the study is to analyze the influence of the use of production inputs on production quantity and to determine the level of efficiency of the use of each production input. The purpose of the research was achieved through the collection of primary data from the results of the garlic farming survey in Sembalon District, East Lombok Regency. As a respondent, 71 farmers cultivate garlic. The research location is in Sembalun Bumbung village and Sembalun Lawang village. The number of sampling units in each village was selected using a proportional random sampling technique of 44 farmers in Sembalun Bumbung village and 27 farmers in Sembalon Lawang village. Production quantity and input quantity data were analyzed by multiple regression followed by an analysis of the ratio of marginal production value to the price per input unit to determine the status of efficiency in the use of production inputs. The results of the study showed that the use of organic fertilizer inputs, ZA fertilizers, and phonska fertilizers had a real effect on the production quantity. The use of organic fertilizers is not optimal, while the use of ZA fertilizers and phonska fertilizers needs to be reduced to increase efficiency.

AN EVALUATION OF THE EFFECT OF EXTERNAL DEBT ON ECONOMIC GROWTH IN SIERRA LEONE

<p>The study sets out to determine whether external debt has a significant relationship with economic growth indices in Sierra Leone. An ex-post facto research design was adopted for the study. Data on gross domestic product, external debt, capital expenditure, and exchange rate were obtained from the Bank of Sierra Leone Statistical Bulletin 2024 for the period 1993-2023. Ordinary Least Square Method of regression was used in which external debt was regressed on gross domestic product, capital expenditure, and exchange rate. A diagnostic test was done using the Augmented Dickey-Fuller (ADF) unit root test, as well as the co-integration and error correction method. Findings show that there is a positive relationship between external debt on one side and gross domestic product (GDP), exchange rate and capital expenditure. The findings imply that small external debt accumulation stimulates the economy, while huge debt has a negative impact. External debts were misappropriated, while debt servicing and repayment stifled infrastructural development. The study recommends, amongst other things, that external debt should be obtained when it is absolutely necessary and applied for productive ventures but not for social services, ensuring that the marginal productivity of the loan is greater than the interest incurred as a result of it. At the same time, the government should strengthen anti-corruption agencies to reduce embezzlements and misappropriations to the barest minimum by reviewing laws establishing them.</p><p> </p><p><strong>JEL</strong>: F34; E22; C22; H63; O11</p><p> </p><p><strong> Article visualizations:</strong></p><p><img src="/-counters-/soc/0792/a.php" alt="Hit counter" /></p>

Обґрунтування пріоритетів збереження трудоресурсного потенціалу регіонів україни в умовах війни та повоєнного відновлення

The war created extraordinary challenges and threats to the human potential of Ukraine’s regions. The most significant is the deepening of the disproportionality and imbalance of the labor market due to the loss of a significant number of qualified personnel (due to migration and mobilization) and changes in the employment structure. This was particularly acutely reflected in the structure of labor resources, particularly its gender-age and professional (educational and qualification) elements. One of the most important factors influencing this structure was foreign migration and the illegal deportation of Ukrainian citizens to the Russian Federation. Effective mechanisms and tools from the regional governing bodies are necessary to ensure compliance between all social and labor sphere links, considering the regional and qualification imbalances in the labor market. Also, to further minimize the risks of the development of the labor market in Ukraine and to preserve the labor resource potential, it is advisable to determine the main socio-economic levers and drivers of regional policy, which will contribute to reducing regional and qualification imbalances, increasing marginal labor productivity and, as a result, increasing the productive capacity of regions. The article evaluates the tools that influence the productive capacity of the economy of the regions of Ukraine in the context of preserving their labor resource potential in the conditions of war and post-war recovery. The main challenges and threats to the human potential of the regions of Ukraine in the conditions of the war and subsequent post-war reconstruction are identified, the most significant of which is the deepening of disproportionality and imbalance of the labor market due to the loss of a significant part of qualified personnel (due to migration and mobilization), as well as changes in the employment structure. Based on the threat analysis, the factors currently fundamental for ensuring the functioning of regional labor markets in Ukraine have been determined. The instruments that influence the economy’s productive capacity were studied with the help of a survey of state authorities in the regions. Based on the research, the main socio-economic levers and drivers of increasing the regional economy’s productive capacity in preserving Ukraine’s labor potential in the conditions of the war and post-war recovery are substantiated. Keywords: labor resource potential, productive capacity, labor market, region, structural disparities, human potential, employment, war, post-war economic recovery.

Industrial robots and export product quality: evidence from China

ABSTRACT In this study, we first construct a theoretical framework for a heterogeneous product quality model to analyse how robot adoption affects international trade through quality upgrading. Then, we use micro-level data from Chinese Customs Trade Statistics and the Annual Survey of Industrial Firms to examine the heterogeneous effects of industrial robots on export product quality. Both theoretical analysis and empirical research show that industrial robots promote export product quality upgrading through effectively improving firms’ total factor productivity and reducing marginal production costs. Moreover, industrial robots have different effects on firms based on product types, ownership properties, and factor intensity. The results show that the effects of industrial robots on export product quality are stronger for homogeneous products, foreign and private enterprises for homogeneous products, foreign and private enterprises, and labour-intensive industries. These findings align with the literature on the wide-ranging impact of industrial robots, while offering a distinct opportunity to empirically investigate enterprises’ diverse responses to a uniform general-purpose technology. This study also diverges from previous research by examining a previously overlooked dimension: productivity-boosting and marginal cost-reducing effects.

ECONOMIC ANALYSIS OF MILLET PRODUCTION IN JERE LOCAL GOVERNMENT AREA, BORNO STATE, NIGERIA.

This research was carried out to determine the profitability of millet production in Jere local Government area of Borno state. Random sampling technique was adopted in this research through which data was collected from ninety (90) farms with the aid of a well-structured questionnaire. Data was analysed using descriptive statistics, gross margin analysis and production functions. Result indicated that 58.9% of respondents were in their economically active age group, majority (76.7%) of the farmers were male, 66.7% were married, while 42.2% had farming experience of between 21 – 30 years in millet production and it was revealed that farms were on a small-scale basis. Result further showed that millet production was profitable with gross margin and net farm income of N29,743.18 and N12,868.00 per hectare respectively. Regression model estimated revealed that double-log was the lead equation with R2 of 68.5%. Also, land, labour and agrochemical had significant impact on the level of millet output at P<0.01 level of probability and F-ratio 35.212. Estimated efficiency ratios showed that land; labour and fertilizer were under-utilised, while agrochemical was over utilised. Return to scale gave a value of 1.27 which implies that millet production was in stage 1 of the production region. It can be concluded that millet production in the study area is profitably. The study recommends that farmers should employ more land; labour and fertilizer, while the use of agrochemical should be cut down in order to improved millet production output for profit maximization.

Trade and inequality in an overlapping generations model with capital accumulation

AbstractWe study the lifecycle aspect of within‐country inequality that stems from capital and labor services supplied by individuals. Our environment is a combination of a multicountry trade model and an overlapping generations model with production and capital accumulation. Trade liberalization increases the measured total factor productivity in each country, which increases the marginal product of capital and incentivizes capital accumulation. Higher capital stock and higher measured productivity raise the marginal product of labor and, hence, wages. Inequality, measured by the ratio of old agents' income to young agents' income, evolves over time due to capital accumulation during the transition from autarky to an open‐economy world. Immediately after liberalization, inequality increases. Over time, capital accumulates at a diminishing rate and inequality declines.

Pay for Performance in the Pool: Sink or Swim?

In the shadow of Title IX's 50th anniversary in 2022, it is fitting to investigate whether female elite swimmers are rewarded the same way male swimmers are. This article thus contributes to the growing literature on gender differences in performance and pay in sport. Our article frames this question in a unique way, as we compare the extent of economic exploitation of women and men in elite swimming. Are female swimmers “underpaid” relative to their marginal revenue products at the same level as their male counterparts?

Endogenous choice of environmental corporate social responsibility in a mixed duopoly

AbstractThis paper constructs green managerial delegation contracts in a mixed duopoly wherein either or both public and private firms may adopt environmental corporate social responsibility (ECSR). We demonstrate that the public (private) firm owner positively (negatively) adopts ECSR incentives under Cournot, whereas the incentives are reversed under Bertrand. We also examine an endogenous ECSR choice game and discover that unilateral ECSR adopted by a public firm appears under Cournot, whereas bilateral ECSR where both firms adopt ECSR incentives appears under Bertrand. Our findings show that coordination of competition mode may be harmful to society if both marginal damage and product substitutability are sufficiently high.

Redesigning automated market power mitigation in electricity markets

Electricity markets are prone to the abuse of market power. Several U.S. markets employ algorithms to monitor and mitigate market power abuse in real-time. The performance of automated mitigation procedures is contingent on precise estimates of firms' marginal production costs. Currently, marginal cost is inferred from the past offers of a plant. We present new estimation approaches and compare them to the currently applied benchmark method. We test the performance of all approaches on auction data from the Iberian power market. The results show that our novel approaches outperform the benchmark approach significantly, reducing the mean (median) absolute estimation error from 11.53 (6.08) €/MWh in the benchmark to 4.03 (2.64) €/MWh for our preferred approach. This approach also performs best in our subsequent simulation of mitigation procedures. Here we find large welfare transfers from supplier to buyer surplus as well as a robust overall welfare gain, stemming from both productive and allocative efficiency gains. Our research contributes to accurate monitoring of market power and improved automated mitigation. Although we focus on power markets, our findings are applicable to monitoring of renewable energy tenders or market power surveillance in rail and air traffic.

Value and economic impact of fuel subsidies on the Mexican fishing industry

ABSTRACT Fuel is an important input in the fishing industry’s activities, and fuel subsidies are aimed at generating more competitiveness and encouraging development. Nevertheless, they can also create incentives for fishers to exert more effort, thereby resulting in overexploitation. This paper estimates the economic value of fuel used by the Mexican fishing industry based on the elasticity of production with respect to fuel (εC) and the value of the marginal product (ρC) through the Cobb-Douglas and Trans-Log production function. The εC and ρC were estimated to be 0.52 and USD 3.1, respectively, with the latter contributing to only 8.3% of the fuel subsidy. Furthermore, a direct relationship is evident when observing the trends and the differences in means of the average price of fishery landings and the number of subsidies between 2011 and 2019. That is, the higher the prices and/or subsidies, the higher the levels of extraction. These results have important implications for fuel management and its relationship with the extraction of fishery resources, especially in countries where a subsidy policy is applied in an attempt to support the sector, but which at the same time can have a negative impact on fishery resources.

Combining Servqual and Kano: Justification for Best Action and Its Selection Process

This study aims to enhance the existing literature on the integration of Servqual and Kano concepts by providing a comprehensive justification for recommending improvement actions to service attributes. By utilizing a theoretical service model that considers factors previously overlooked, such as the impact on revenue and cost, performance variability, diminishing marginal utility in consumption, and diminishing marginal product of resources, this study offers propositions and proofs for the best actions in each paired category of service attributes within the combined Servqual and Kano assessments. The findings are presented in the form of an evaluation table, which links each paired category of attribute with its respective optimal action. Importantly, this study introduces novel perspectives on the definition of the best action and the basis for its selection. Unlike previous works that solely focus on customer satisfaction, this research defines the best action from the perspective of the service provider whose primary goal is to maximize profit. The proposed procedure for determining the best action obtained in this study is more justifiable, as it relies less on the ambiguous process of correctly identifying the final categories of attributes in both models. To illustrate the new integration process, an example based on simulated data is also provided. Overall, this study contributes to the field by offering a comprehensive and justified approach to improving service attributes through the integration of Servqual and Kano concepts.

Short- and long-term effects of carbon taxation on the prices of products shipped by sea

This study analyzes econometrically the effect of fuel carbon taxation on the prices of internationally traded goods transported by the maritime sector. Around 80% of global trade by volume is transported by sea, contributing to a nontrivial level of carbon emissions. This study is the first to analyze the effect of carbon taxation on the prices of export products transported by sea, using detailed data for the heaviest 6-digit products from 21 industries that account for 75% of the total weight of goods transported by sea. The results reveal that the closer a product is to the core competence of the exporting firm (lowest marginal production costs), the weaker the effect of the carbon tax will be on prices. This effect on export prices will be even weaker for products of certain industries that have the highest unit sales value/weight ratios. To contribute to decarbonizing the maritime sector, a carbon tax should be maintained uninterruptedly to fully internalize the awareness that improving fuel consumption competitiveness by considering the distance traveled and weight of traded products to ultimately reduce carbon tax costs.

Analysis of Allocative Efficiency of Watermelon Farming in Kapuas Regency, Central Kalimantan Province

The objective of this research is to analyze the costs, revenues, and profits of watermelon farming, to examine the impact of the use of production factors in watermelon farming, and to evaluate the allocative efficiency level of watermelon farming in Kapuas Regency, Central Kalimantan Province. The population of this research consists of 113 farmers, from which 55 were selected using simple random sampling techniques. The data processing method used to analyze the costs, revenues, and profits of watermelon farming includes using a multiple linear regression model, specifically the Cobb-Douglas function type. Additionally, to analyze the allocative efficiency of production factors used by farmers in watermelon farming, the comparison of a production factor’s Marginal Product Value (MPVx) with the price of the production factor (Px) is set to be equal to 1. Based on the results of the research and data processing, the average revenue obtained from watermelon farming in Kapuas Regency is IDR 75,619,181.82 per farm, and the average profit earned by watermelon farmers is IDR 45,541,259 per farm. The statistical test results of the Cobb-Douglas production function show that collectively (simultaneously), the production factors (land area, number of seeds, organic fertilizer, inorganic fertilizer, pesticides, and labor) significantly affect watermelon production. However, the partial test results indicate that the production factors of land area, seeds, organic fertilizer, inorganic fertilizer, and labor significantly affect watermelon production, except for the production factor of pesticides. The statistical test results for allocative efficiency (price efficiency) show that three production factors, namely organic fertilizer, labor, and pesticides, are used efficiently, meaning the marginal product equals the price of the production factor. The use of land area, seeds, and inorganic fertilizer is not yet efficient and needs to be increased to reach an efficient point.

Monopsony Power in the Labor Market: From Theory to Policy

Labor markets are not perfectly competitive: Monopsony power enables employers to pay workers less than the marginal revenue product of labor. We review three theoretical frameworks explaining monopsony power. Oligopsony models attribute it to strategic interactions among a limited number of firms. Job differentiation models cite imperfect job substitution and heterogeneous worker preferences. Search-and-matching models point to search frictions hindering instantaneous access to all available jobs. We then develop a theory-informed discussion of the empirical evidence on antitrust policies, policies that reduce barriers to job switching, and policies countering monopsony's effects on workers. Preventing mergers and regulating noncompetition agreements can increase wages by preserving competition among employers. Minimum wages can mitigate the effect of monopsony power by increasing wages without reducing employment. The insights garnered from both theoretical models and empirical evidence offer a road map for crafting policies that can enhance competition in the labor market.

Specification of the health production function and its behavioral implications.

The health production function of the canonical health-capital model is generalized to allow the state of health to affect the total and marginal products of health investment. If the total and marginal products of health investment are nonincreasing functions of the state of health, then the solution of the generalized model is locally qualitatively identical to that of the canonical model. Moreover, and in contrast to the canonical model, the generalized model is able to rationalize the cycling of the state of health and health investment observed in some individuals. The necessary conditions on the health production function for cyclical behavior are identified as well.

Learning From Ricardo and Thompson: Machinery and Labor in the Early Industrial Revolution and in the Age of Artificial Intelligence

David Ricardo initially believed machinery would help workers but revised his opinion, likely based on the impact of automation in the textile industry. Despite cotton textiles becoming one of the largest sectors in the British economy, real wages for cotton weavers did not rise for decades. As E.P. Thompson emphasized, automation forced workers into unhealthy factories with close surveillance and little autonomy. Automation can increase wages, but only when accompanied by new tasks that raise the marginal productivity of labor and/or when there is sufficient additional hiring in complementary sectors. Wages are unlikely to rise when workers cannot push for their share of productivity growth. Today, artificial intelligence may boost average productivity, but it also may replace many workers while degrading job quality for those who remain employed. As in Ricardo's time, the impact of automation on workers today is more complex than an automatic linkage from higher productivity to better wages.

Export competition with China and firms' coping strategies

AbstractThis paper analyses how intensified Chinese competition in export markets affects firms' coping strategies. Using a novel identification approach that exploits changes in China's product‐specific export policies across industries, we find that Chinese export competition reduces the aggregate value of product‐ and destination‐specific exports of Finland, primarily by putting a downward pressure on export prices. The firm‐level analysis using Finnish administrative data shows that firms undertake larger price cuts for homogeneous products than for differentiated export products. We analyse further export firms' coping strategies on product range margin, and find that firms drop their marginal products as the Chinese export competition intensifies. Our results highlight the increasing importance of competition with China for exporters from developed countries.