PRODUCTIVITY GROWTH, TECHNICAL EFFICIENCY, AND RETURNS TO SCALE IN THE WASHINGTON STATE SAWMILL INDUSTRY

Abstract

We employed data envelopment analysis (DEA) to examine the technical and scale efficiency of the sawmill industry of Washington State. We found that there is regional variation in the rate of technical efficiency and that for most years the industry in aggregate operated at a point of modest scale inefficiency. In addition, we examined the industry's rate of productivity growth and technical change between the early 1970s and late 1990s using the Malmquist input-oriented productivity index. We found that the industry experienced a modest average annual decline in productivity and technical change during the 1970s, but experienced strong productivity growth and technical change during the 1980s and 1990s.