RT Journal Article
SR Electronic
T1 Capacity Utilization in a Generalized Malmquist Index Including Environmental Factors: A Decomposition Analysis
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 529
OP 538
DO 10.3368/le.85.3.529
VO 85
IS 3
A1 Bye, Torstein
A1 Bruvoll, Annegrete
A1 Larsson, Jan
YR 2009
UL http://le.uwpress.org/content/85/3/529.abstract
AB Productivity measures ignoring environmental effects may give misleading information on total productivity growth. Further, business cycles in the form of capacity utilization may significantly influence productivity measures. We develop an overall Malmquist productivity index and decompose changing efficiency rates into a contribution from environmental factors, capital, and capacity utilization. Our new combined capacity utilization element contributes to the literature in that it also takes into account the restriction for producing negative externalities. Empirical applications illustrate that the choice of inputs influences the overall productivity measure and its decomposition into efficiency changes and technical changes, and the capacity utilization element. (JEL C14, O12)