Infrastructure and Economic Efficiency in Italian Regions

Using the stochastic frontier approach based on Farrel's index to measure technical and allocative efficiency, we investigate the level of productive efficiency in Italian regions for the period 1970–1994. We found a 31% of technical inefficiency and about 21% of allocative inefficiency. The analysis is extended to measure the impact of public capital puzzle on regional productivity. The results show that infrastructure play an important role and that railways and maritime capital have an higher degree of effectiveness than the provision of roads.

[1]  Douglas Holtz-Eakin,et al.  Public-Sector Capital and the Productivity Puzzle , 1992 .

[2]  C. Lovell,et al.  On the estimation of technical inefficiency in the stochastic frontier production function model , 1982 .

[3]  E. Gramlich,et al.  Infrastructure Investment: A Review Essay , 1994 .

[4]  M. Marcellino,et al.  Public Capital and Economic Performance: Evidence from Italy , 2000 .

[5]  Subal C. Kumbhakar,et al.  On the Estimation of Technical and Allocative Inefficiency Using Stochastic Frontier Functions: The Case of U.S. Class 1 Railroads , 1988 .

[6]  W. Meeusen,et al.  Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error , 1977 .

[7]  David Alan Aschauer,et al.  IS PUBLIC EXPENDITURE PRODUCTIVE , 1989 .

[8]  Ronald S. Warren,et al.  Public Infrastructure and Private Productivity: A Stochastic-Frontier Approach , 1999 .

[9]  S. Ray,et al.  PRODUCTIVITY GROWTH, TECHNICAL PROGRESS AND EFFICIENCY CHANGE IN INDUSTRIALIZED COUNTRIES: COMMENT , 1997 .

[10]  Catherine J. Morrison Paul,et al.  State Infrastructure and Productive Performance , 1992 .

[11]  M. Farrell,et al.  THE MEASUREMENT OF PRODUCTIVITY EFFICIENCY , 1957 .

[12]  Lucio Picci,et al.  Productivity and Infrastructure in the Italian Regions , 1995 .

[13]  A. Haughwout.  Aggregate Production Functions, Interregional Equilibrium, and the Measurement of Infrastructure Productivity☆ , 1998 .

[14]  Subal C. Kumbhakar,et al.  The specification of technical and allocative inefficiency in stochastic production and profit frontiers , 1987 .

[15]  C. Lovell,et al.  Estimating technical and allocative inefficiency relative to stochastic production and cost frontiers , 1979 .

[16]  J. Puig-Junoy.  Technical Inefficiency and Public Capital in U.S. States: A Stochastic Frontier Approach , 2001 .

[17]  Ramon Caminal.  Personal Redistribution and the Regional Allocation of Public Investment , 2000 .

[18]  Arnold Zellner,et al.  Generalized Production Functions , 1969 .

[19]  TFP, Costs, and Public Infrastructure: An Equivocal Relationship , 2000 .

[20]  W. Newey,et al.  Estimating vector autoregressions with panel data , 1988 .

[21]  D. Aigner,et al.  P. Schmidt, 1977,?Formulation and estimation of stochastic frontier production function models,? , 1977 .