1002 MITE-o132/6.5/ds r3

ational statistics on coal-mining productivity show that—except during the 1970s—coal mines have become steadily more efficient. More coal is removed per hour of work, causing a drop in both mining costs and coal prices. However, a new Energy Laboratory study suggests that those national statistics do not tell the whole story. When the researchers analyzed productivity data for more than nineteen thousand mines from 1972 through 1995, they found that some regions and some technologies lagged far behind others. Thus, while western longwall mines were five times more productive in 1995 than in 1972, other types of mines improved by less than half as much—a discrepancy lost in the nationally aggregated data. Detailed analyses of why productivity changed brought some unexpected results. For example, even after accounting for geology and technology, bigger mines were more productive than smaller ones. And prices affect the national aggregates. When coal prices increase relative to labor prices, companies open smaller mines with less favorable geology and overall productivity drops. Indeed, according to the analysis, price increases were N more important than new regulations in causing overall productivity to plummet in the 1970s. The study shows that aggregated national productivity data do not provide an accurate picture of the efficiency with which an industry uses its resources or of the causes of changes in overall productivity.