REES Visiting Speaker Seminar: Dr. Filip Premik, Monash University, Melbourne, Australia – Friday, January 26, 2024

Date(s) - 26/01/2024
3:30 pm - 5:00 pm
550 General Services Building, 550 General Services Building University of Alberta , Edmonton Alberta

Title: The Cost of Variety: About Productivity of Differentiated Input

Speaker: Dr. Filip Premik, Assistant Professor, Department of Economics, Monash University, Melbourne, Australia

Date: Friday, January 26, 2023

Time: 3:30 – 5:00 PM

Location: 550 General Services Building


In many markets, differentiated goods are used as intermediate inputs in producing final goods or services. The degree of differentiation may affect productivity of these inputs, which would typically decrease if usage of each differentiated input requires a certain set of skills among the staff or if maintenance necessitates ordering and storing spare parts. I document this phenomenon using unique data on urban bus fleets. Specifically, buses of the same make and model exhibit systematically higher yearly mileage if their share in the fleet is higher. I also estimate the effects of bus fleet variety on employment, spare parts costs and the firm’s financial outcomes. Guided by the discovered data patterns, I develop a structural model of a bus company production function and estimate it to quantify inefficiency resulting from excessive fleet variety.

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