Rent-seeking measurement in coal mining by means of labour unrest: an application of the distance function

Rodriguez-Alvarez, Ana and Del Rosal, Ignacio and Baños Pino, Jose (2002): Rent-seeking measurement in coal mining by means of labour unrest: an application of the distance function. Published in: Journal of Productivity Analysis , Vol. 1, No. 27 (2007): pp. 73-83.

Abstract

We propose a method based on the distance function to empirically estimate the social cost arising from rent seeking behaviour in declining industries. Due to import competition, the factors of a particular industry undergo losses in real income, and have incentives to seek protection. In the case of declining industries, workers play a central role and the losses in output due to strikes are used to quantify the social cost of rent seeking. In our model, strikes are considered as a “bad” input into the production process. We apply our approach to the case of Spanish coal mining. We have estimated a system of equations formed by the input distance function and cost share equations using annual data over the period 1974-1997. This procedure has allowed us to calculate the cost that strikes have imposed on the sector

• Item Type: MPRA Paper
• Institution: Departmen of Economics. School of Economics and Business Administration. University of Oviedo
• Language: English
• Keywords: Production theory; rent seeking; input distance function; shadow prices; coal sector
• Subjects: F - International Economics > F1 - Trade > F13 - Trade Policy ; International Trade Organizations; D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior; L - Industrial Organization > L7 - Industry Studies: Primary Products and Construction > L71 - Mining, Extraction, and Refining: Hydrocarbon Fuels

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