Productivity decline in Australian coal mining

Lovell, C. A. K. and Lovell, J. E. (2013) Productivity decline in Australian coal mining. Journal of Productivity Analysis, 40 3: 443-455. doi:10.1007/s11123-013-0340-4

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Author Lovell, C. A. K.
Lovell, J. E.
Title Productivity decline in Australian coal mining
Journal name Journal of Productivity Analysis   Check publisher's open access policy
ISSN 0895-562X
Publication date 2013-12-01
Sub-type Article (original research)
DOI 10.1007/s11123-013-0340-4
Open Access Status Not yet assessed
Volume 40
Issue 3
Start page 443
End page 455
Total pages 13
Place of publication New York, NY, United States
Publisher Springer New York
Language eng
Formatted abstract
A recent Australian Productivity Commission Staff Working Paper has estimated a 25 % decline in value added total factor productivity in Australian coal mining over the period 2000/2001-2006/2007. The decline coincides with a period of rapidly increasing global demand for, and price of, coal, which has made it economically feasible to mine coal that was previously uneconomic. This "digging deeper" hypothesis is plausible, although our initial surprise at the magnitude of the estimated decline has motivated our investigation of productivity in Australian coal mining, its financial implications and its likely causes. We begin by applying the Staff Working Paper methodology to revised data to estimate the magnitude of the decline. This exercise shrinks the estimated magnitude of the decline to 21 %. We continue by applying an alternate methodology to the revised data to re-estimate the magnitude of the decline. This exercise generates no further change to the estimated rate of decline. We then compare estimates of the decline obtained from value added and gross output frameworks, and we find a considerable shrinkage in the estimated productivity decline that highlights the importance of the Domar factor in productivity measurement. We continue by exploring the financial consequences of the productivity decline. We conclude by joining the search for sources of the productivity decline.
Keyword Coal mining
Price recovery
Q-Index Code C1
Q-Index Status Confirmed Code
Institutional Status UQ

Document type: Journal Article
Sub-type: Article (original research)
Collections: Official 2014 Collection
School of Economics Publications
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