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AGEE, MARK D.
ATKINSON, SCOTT E.
CROCKER, THOMAS D.
Multiple-output Child Health Production Functions: The Impact of Time-varying and Time-invariant Inputs
Southern Economic Journal 75,2 (October 2008): 410-428
Cohort(s): Children of the NLSY79
ID Number: 6024
Publisher: Southern Economic Association

Many production activities generate undesirable outputs in conjunction with the desirable outputs. In this paper we present the first estimates of a multiple-input, multiple-output directional distance function that relates good and bad inputs from home, school, and environment to good and bad outputs, measured as children’s cognitive and behavioral development. This household directional distance function is estimated using a balanced panel of 369 families from the National Longitudinal Survey of Youth-Child Sample for 1996 to 2000 using the generalized method of moments within estimator and instrumental variables. We recover consistent partial effects for the time-invariant variables in a second-stage regression and estimate their corrected asymptotic standard errors. We then compute and examine productivity differences among households defined as the increase (decrease) in good (bad) outputs that families could attain with constant inputs if they were operating on the technological frontier. Our estimates suggest the presence of significant inefficiency among sample families that diminishes over time.

AGEE, MARK D.
ATKINSON, SCOTT E.
CROCKER, THOMAS D.
On the Technical Efficiency of Multiple-Input, Multiple-Output Child Outcome Production Functions
Working Paper, Department of Economics and Finance, University of Wyoming, November 2, 2005. Also: http://business.uwyo.edu/ECONFIN/Papers/ChildHealth.pdf
Cohort(s): Children of the NLSY79, NLSY79
ID Number: 5160
Publisher: Department of Economics and Finance, University of Wyoming

Permission to reprint the abstract has not been received from the publisher.

Many production activities generate undesirable outputs in conjunction with the desirable outputs. We estimate a multiple-input, multiple-output directional distance function to analyze the relationship between parental home, school, and environmental inputs and children's cognitive and behavioral development. A household directional distance function is estimated using a panel of 206 families from the National Longitudinal Survey of Youth-Child Sample for the years 1988 to 1990 using Hausman and Taylor's (1981) within-groups instrumental variables technique. We then transform our fitted model to compute marginal effects of any input on any output, and to compute technical inefficiencies of households, defined as the increase (decrease) in good (bad) outputs that sample families could attain from a given level of inputs if they were operating on the technological frontier. Our estimates suggest the presence of significant inefficiency (approaching 20 percent) among sample families? production (reduction) of good (bad) outputs. Given these inefficiencies, public provision of education services for young children such as Head Start or other health and welfare programs that target improvements in children's home environment may be the most effective means of improving child outcomes.


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