Abstract
This paper develops a dynamic–network DEA (data envelopment analysis) model where total output is jointly produced from two sectors: a human capital sector and a physical capital sector. Each prefecture produces a final output and an intermediate product which is used to augment future physical capital. The optimization method allows future production possibilities to be enhanced if some final output in the current period is foregone so that larger amounts of the intermediate product can be produced. The goal is to choose the amounts of final output and intermediate product so as to maximize the size of the production possibility set. The method also allows identification of whether output is constrained by a lack of physical capital, a lack of human capital or a lack of both types of capital. We apply our method to 47 Japanese prefectures during the period 2007–2009. A key finding is that a lack of human capital is constraining potential output.
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Notes
Fukuyama and Mirdehghan (2012) discuss the identification of divisional efficiency from a Pareto–Koopmans efficiency perspective.
Fukao and Yue (2000) estimated this index for the period 1955–1995.
For a complete account of Fukao and Yue (2000)’s procedure, see http://www.ier.hit-u.ac.jp/~fukao/japanese/data/fuken2000/datamaking.
The regions (prefectures within each region) from northeast to southwest in Japan are Hokkaido–Tohoku (Hokkaido, Aomori, Iwate, Miyagi, Akita, Yamagata, Fukushima), Kanto (Ibaraki, Chiba Tochigi, Tokyo, Gumma, Kanagawa, Saitama, Yamanashi, Nagano), Hokuriku–Toukai (Niigata, Gifu, Toyama, Shizuoka, Ishikawa, Aichi, Fukui, Mie), Kansai (Shiga, Kyoto, Osaka, Hyogo, Nara, Wakayama), Chugoku–Shikoku (Tottori, Tokushima, Shimane, Kagawa, Okayama, Ehime, Hiroshima, Kochi, Yamaguchi) and Kyusyu–Okinawa (Fukuoka, Okinawa, Saga, Nagasaki, Kumamoto, Oita Miyazaki, Kagoshima).
We used a linear interpolation technique to interpolate the values between 2007 and 2009 because the ministry only report the traveling time estimates every 5 years.
To obtain the parameter estimates based on bootstrap regression analysis, we adapted the R-Package called ‘rDEA’ developed by Jaak Simm and Galina Besstremyannaya (2016) (see the Web site https://github.com/jaak-s/rDEA maintained by Jaak Simm).
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Fukuyama, H., Hashimoto, A., Tone, K. et al. Does human capital or physical capital constrain output in Japanese prefectures?. Empir Econ 54, 379–393 (2018). https://doi.org/10.1007/s00181-016-1202-5
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DOI: https://doi.org/10.1007/s00181-016-1202-5