Course: Productivity and Efficiency Analysis (PEA)

Program

General Objectives of the course

The course, with an interdisciplinary approach, combines theoretical lectures on the economics of production, with lectures on the main econometric approaches proposed in the literature, including recent developments, and practical sessions to introduce to the main open source software available to carry out productivity and efficiency analysis.

The main objectives of the course are:

-        Present a general overview on the economic theory of productivity and efficiency;

-        Propose a unified framework on the main methodologies available to estimate and compare productivity and efficiency of Decision Making Units (DMUs);

-        Make an introduction to the main open source software available to estimate productivity and efficiency;

-        Provide laboratory sessions to implement productivity and efficiency analyses in practice;

-        Provide the basic concepts to analyse the specialised literature;

-        Interact with students through assisted laboratory and the realization of a practical work on real data, seminars and oral presentations.

Specific Objectives

• Knowledge and understanding: demonstrate the knowledge of the basic elements of productivity and efficiency analysis;

• Ability to apply knowledge and understanding: to be able to apply efficiency analysis techniques learned during the course in their own engineering area of specialization;

• Judgment autonomy: to be able to perform an efficiency analysis with critical spirit, choosing the appropriate method and correctly implementing it.

• Communication skills: being able to communicate the results of the analysis and its information to different types of interlocutors;

• Learning skills: to develop the necessary skills to apply and develop autonomously the methods learned during the course.

Programme structure

 The course is composed of 6 modules.

-       Module 1. Introduction. Basic concepts of microeconomics. Basic concepts of econometrics (including nonparametric statistics). Basic concepts of operations research.

-        Module 2. Parametric models.

-        Module 3. Nonparametric models.

-        Module 4. Advanced recent models.

-        Module 5. Practical sessions.

-        Module 6. Empirical analysis and applications.

This last module also involves the active participation of students, who will be asked to prepare an essay (empirical work) with real data. Practical guidelines on how to write the essay and on the choice/use of the techniques will be given during the practical laboratory sessions.

 Modality of the course

The course is based on lectures, practical laboratory and seminars.

Evaluation

The course grade determination is as follows. Homework assignments (around 10%); In-class presentation (around 25%); Final essay presentation and discussion (around 65%).

 Textbooks

During the course, lecture notes and additional materials will be distributed.

The main textbooks of the course are:

Coelli, T.J., Prasada Rao, D.S., O’ Donnell C. J. and Battese, G.E., (2005), An Introduction to Efficiency and Productivity Analysis, Second Edition, Springer, New York (USA).

Daraio C., Simar L. (2007), Advanced Robust and Nonparametric Methods in Efficiency Analysis. Methodology and Applications, Springer, New York (USA).

Kumbhakar S. C., Knox Lovell C. A. (2000), Stochastic frontier analysis, Cambridge University Press New York.

Färe R., Grosskopf S. (2005) New Directions: Efficiency and Productivity, Springer, New York (USA).

Fried H.O., Lovell C.A.K., Schmidt S.S., eds., (2008), The Measurement of Productive Efficiency, Oxford University Press.