Generating nice efficiency charts

[Konrad Zdeb]

Colleagues,

I would like to generate some charts for:

Allocative efficiency

and for x-efficiency.

The charts are taken from the Economics Online. I was wondering if some of you could be kind and suggest the code that would enable me to generate the illustrated curves?

[Stephen Jenkins]

I too am interested in hearing Forum views about this topic -- I have recently been drawing curves that differ from these, but the same issues arise. (In a sense, the thread title could be: "How to draw diagrams commonly used in economics and related disciplines?") In my case, the diagrams were of iso-welfare contours from a homothetic social welfare function combined with overlays of straight lines. Added text (as in Konrad's picture, and in mine) caused relatively few problems, just lots of fiddling. The main issue I found was: should I try and rely on twoway function in which case the range option is essential, or else or as well, generate some synthetic data that respect the known functional forms, and then plot them using twoway line? Despite having closed form expressions for the objects I wanted to graph, I found it too tricky to draw them using function -- using the range option also had consequences for the y-axis, and turned out to be a real hassle. So, I mainly settled for the synthetic data approach.

[Nick Cox]

Stephen: Doesn't have to be either/or. When faced with similar problems, I've found it easier sometimes to use a function with qualitatively correct behaviour and sometimes to use synthetic data. Given that you go twoway function .... || line ... || scatter ... you can mix and match according to what is easier.

[Stephen Jenkins]

Sorry if I wasn't clear, Nick. What you suggest is precisely what I ended up doing. (Hence my reference to "or else or as well".) And perhaps I should underline, because I didn't in my last post, that success is predicated on having functional forms for the objects you want to draw. [And then fiddling around with the measurement scale.] So, Konrad, do you have expressions for the applications you are considering?

[Konrad Zdeb]

(...) In a sense, the thread title could be: "How to draw diagrams commonly used in economics and related disciplines?" (...)

That's correct. I was simply hoping that Colleagues more familiar with economic research will have the required code at hand. I need the charts for illustrative purposes and wanted to generate them from scratch so it would be easy apply minor tweaks to the layout and labelling.