Showing papers on "Capacity utilization published in 1975"

Capacity Utilization under Alternative Regulatory Restraints: An Analysis of Taxi Markets

Abstract: Both the Averch-Johnson (A-J) model and the Chamberlin model fail to consider the value of excess capacity to consumers. Service industries, whether they are regulated or not, will usually have excess capacity in the Chamberlinian sense because this capacity conserves time for consumers. This paper examines a model of the taxi industry where allowance is made for capacity to affect the value or quality of the service through its effect on waiting time. The central issue is to determine equilibrium output, capacity, and the utilization of capacity when the market is organized as a franchised monopoly, through a medallion system, and when there is free entry, and to exhibit the relationship among these variables and prices, cost of capacity and output, and policies of the regulator. It is found that many of the characteristics of taxi markets that would appear to confirm the monopolistic-competition thesis arise because of the nature of regulation of these markets.

The Effect of Price and Entry Regulation on Airline Output, Capacity and Efficiency

Abstract: This paper develops a model of capacity utilization in an industry where price and entry are regulated. The distinctive feature is that capacity affects waiting time of consumers, and, therefore, influences demand. The result is that capacity utilization, output, and costs are jointly determined as a function of the regulator's policies, the value of time of consumers, and other exogenous variables. The model is estimated with airline data, and estimates of the price elasticity of demand, corrected for induced quality variation, and of the consumer's marginal valuation of capacity are obtained. These are then used to assess the efficiency of airline regulation.

Die verschiedenen Konzepte des Akzelerators

Abstract: In theoretical analysis the accelerator concept is attractive because it can explain changes in investment which do not run parallel to demand. Empirical tests of the accelerator usually show unsatisfactory results. This is partly due to the specification used for the estimation: the relation between capital stock and production (the first level of estimation) is not popular because of the time trend in the variables; instead frequently a regression of investment expenditure on the change in production (second level of estimation) is applied. But because of the cyclical variations in the capital-output ratio this specification is not a good substitute for the first one. This paper shows that with the help of the relation between capital stock and output (“naive” accelerator) the highly different phases of investment activity can be explained, but that the individual annual observations follow another set of rules. Within the “flexible” accelerator the attemps that use only flow magnitudes do not represent a further development, but rather a counter-hypothesis of the original accelerator concept: flow magnitudes can explain medium-term variations only to a very small extent. This is contrary to the accelerator concept which explains considerable investment variations with the help of relatively small output variations. Attempts which explain investment variations through a connection between output and capital stock, expand the accelerator theory in so far as they take account of disequilibrium situations. The econometrically estimated equations give an excellent picture of short-term and medium-term investment activity. The economic interpretation of this equation shows, however, that in addition to the explicitly used variables (capital stock and output) other magnitudes contribute implicity to these excellent results. The merit of the accelerator theory then is not to be seen in a complete “explanation” of investment behavior, but rather in the fact that it shows highly variable investment demand for capacity purposes which again is dampened by other factors in such a way as to exhibit medium-term variations in capacity utilization.

Ein Beitrag zur Messung gesamtwirtschaftlicher Kapazitätsauslastung und konjunktureller Ungleichgewichte

Abstract: For the purpose of estimating total capacity utilization a potential output measure is calculated for the Austrian economy by means of macro-economic production functions. The production functions (Cobb-Douglas, dynamic Cobb-Douglas, C.E.S.) are estimated with yearly as well as with quarterly data, using input data (labor, capital) standardized for differences in utilization. The gap between actual GNP (without agriculture) and the potential output estimated with quarterly data is a measure of global capacity utilization. This measure can be used to date business cycle turning points. The cyclical pattern resulting from these calculations is compared with more traditional business cycle measures, such as growth rates and deviations from trends. The turning points resulting from the potential output gap method practically always coincide with the ones calculated with the help of deviations from a trend.

A Conspicuous Production Theory of Resource Allocation in Higher Education.

Abstract: Despite well-founded predictions that the 1970's and 80's would be characterized by excess capacity in graduate education, new graduate programs have continued to appear and existing programs have expanded capacity. This paper proposes a utility maximization theory to explain the continuation of the growth process and describes the nature of the public policy which will be necessary to effect changes in resource allocation in higher education.

Price formation and the inflationary process in a small open economy (The Netherlands)

Abstract: Price formation in the manufacturing, services, building and agricultural sectors is analysed by estimating price equations in which unit labour costs, import prices, capacity utilization and the structure of the sellers market (sheltered or competitive) play a part. These equations have been included in a model in which sectoral wages and social security premiums are endogenous as well. This model, which is still partial since it considerse.g. labour productivity and capacity utilization as exogenous, allows a study of the intersectoral multiplier effects which were found to be quite considerable.

Inventory and Critique of Estimates of U.S. Agricultural Capacity

Abstract: The objectives of this paper are threefold: to assess where we are in research to measure agriculture's capacity to produce and prevailing levels of capacity utilization rates; to observe some possible roadblocks and methodological issues relating to the estimation of agricultural capacity and its utilization, assuming that such estimates should be consistent with those for other economic sectors and compatible with estimates of productivity and efficiency; and to suggest avenues that might lead toward estimates of agricultural capacity and its utilization.

Truck transportation efficiency

Abstract: The relation between "excess capacity" and the quality of service is discussed, and the queueing theory is applied to two aspects of the truck transportation industry: the shipper and the trucking firm. The shippers demand for transport is treated as derived from the demand for his product. The assumptions are made that the time between order arrivals at the shipping firm is random and exponentially distributed, and that the time required by the shipper to fillorders is also random and exponentially distributed. Important features evident from the work described here include the following: the value of both goods being shipped and the optimal price are related; the transport price will vary with the traffic generating capacity of the destination; the overall level of capacity provided by the trucking industry is a function of the regulated rate; although it is not possible to specify a single formula for rates as a function of distance, it is shown that the commonly held view that rates per mile should necessarily fall as distance increases in not valid; based on the findings, the efficiency of route and commodity restrictions may be analyzed.

Analysis of Harvesting, Loading, and Transportation of Farm Grains

Abstract: Selecting harvesting equipment for greatest capacity is often a compromise between excess capacity for some years and too limited capacity for others. We expected that the harvester capacity producing the highest long-run profit would also produce a higher year-to-year variability of profit than would a larger-capacity machine which would also produce a lower long-run profit. To balance the long-run profit against the higher risk, the decision- maker needs a measure of the risk involved.Simulating production systems is an effective way to develop decision-making information. Trans forming observations of the behavior of real-world systems into the kind of information which can form a basis for decisions is a challenging task in agri cultural-production systems. This paper discusses a harvesting and transportation system simulator that can help the decision-maker to determine the size and amount of machinery needed to complete a har vesting operation in a given amount of time.Inputs to the model include th...