What's happening at IRRI
Thursday, July 14, 2016, 01:15pm - 02:15pm
Productivity, Efficiency, and Resource (Financial) Constraint
Subal C. Kumbhakar
University Distinguished Professor, Department of Economics, State University of New York, Binghamton, New York, USA
The term efficiency is widely used by almost everyone (not just economists), often without having a precise meaning. Similarly, productivity and efficiency are often interchangeably used. Although somewhat similar, these two concepts are not identical in meaning in that lower productivity does not necessarily mean lower efficiency. The notion of single vs multiple technologies is emphasized in discussing (estimating) productivity and efficiency. We define these terms more formally based on microeconomic foundation. We then decompose productivity change into various components, including efficiency change. Profitability change is shown to be related to productivity change plus components related to changes in output and input prices. Finally, we emphasize the role of resource (financial) constraint on efficiency, productivity, and profitability.
Havener Auditorium, International Rice Research Institute, Los Baños, 4030 Laguna, Philippines