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

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  • Rodriguez-Alvarez, Ana
  • Del Rosal, Ignacio
  • Baños Pino, Jose

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

Suggested Citation

  • Rodriguez-Alvarez, Ana & Del Rosal, Ignacio & Baños Pino, Jose, 2002. "Rent-seeking measurement in coal mining by means of labour unrest: an application of the distance function," MPRA Paper 3682, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:3682
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    References listed on IDEAS

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    More about this item

    Keywords

    Production theory; rent seeking; input distance function; shadow prices; coal sector;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels

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