Regulatory and Environmental Effects on Public Transit Efficiency. A Mixed DEA-SFA Approach

The aim of this paper is to account for the impact of statistical noise and exogenous regulatory and environmental factors on the efficiency of public transit systems in a DEA-based framework. To this end, we implement a three-stage DEA-SFA mixed approach based on Fried et al. (2002) using a 1993-1999 panel of 42 Italian public transit companies. This allows us to decompose input-specific DEA inefficiency measures into three components: exogenous effects, pure managerial inefficiency, and statistical noise. First, the initial evaluation of producer performance is carried out using conventional variable returns to scale DEA (Banker et al., 1984). Second, a SFA approach (Battese and Coelli, 1992) is used to regress single input slacks on subsidies regulation (cost-plus versus fixed-price contracts) and a set of environmental variables including network speed and user density. Finally, third stage re-runs DEA on inputs purged of both exogenous effects and statistical noise. Results are such that adjusting for the type of regulatory scheme, environmental conditions, and statistical noise increases average efficiency in the industry and reduces dispersion among firms. Furthermore, the implementation of fixed-price subsidies is found to enhance efficiency in the usage of “drivers” and “materials and services” inputs. Such a result sheds some light on the determinants of input-specific efficiency differentials in the industry, improving the existing evidence on mean overall cost efficiency (e.g. Gagnepain e Ivaldi, 2002; Piacenza, 2006). As a policy implication, it is confirmed the relevance of regula tion aimed at replacing cost-plus subsidization mechanisms with high-powered incentive contracts as well as improving operating conditions of public transport networks.Public transit systems, Regulation, Environmental effects, Statistical noise, Data Envelopment Analysis (DEA), Stochastic Frontier Analysis (SFA)

Are Hospital Pharmacies More Efficient if They Employ Nurses?

This paper assesses the efficiency of utilizing nurses in Washington State hospital pharmacies. We take the perspective of a pharmacy department manager and model an input oriented hospital pharmacy production process. Data envelopment analysis (DEA) is used to examine both scale efficiency and technical efficiency, and differences across hospital pharmacies that use and do not use nurse staffing are analyzed using cross-tabulations and nonparametric hypothesis tests. The results indicate that the use of nurse staffing does not significantly impact either scale or technical efficiency. Thus, permitting nurses to play a greater role in hospital pharmacies does not adversely affect efficiency. This paper has important policy implications for hospital administrators and pharmacists.

Efficiency of public spending in support of R&D activities

This study provides an empirical assessment of the level of efficiency of public R&D spending and public R&D support for private R&D. This study aims at assessing the level of efficiency of public R&D spending and public R&D support for private R&D and to compare efficiency scores among OECD countries, in particular EU Member states over the past two decades. The analysis rests on the concept of efficiency which is based on the relationship between public R&D spending and the additional R&D in the business sector induced by such measures.Public, private R&D, (determinants of) efficiency, framework conditions, SFA, DEA.

Efficiency Measurement in the Local Public Sector: Econometric and Mathematical Programming Frontier Techniques

Local government in advanced economies is undergoing a period of rapid reform aimed at enhancing its efficiency and effectiveness. Accordingly, the definition, measurement and improvement of organisational performance is crucial. Despite the importance of efficiency measurement in local government it is only relatively recently that econometric and mathematical frontier techniques have been applied to local public services. This paper attempts to provide a synoptic survey of the comparatively few empirical analyses of efficiency measurement in local government. We examine both the measurement of inefficiency in local public services and the determinants of local public sector efficiency. The implications of efficiency measurement for practitioners in local government are examined by way of conclusion.

- CREDIT RISK AND EFFICIENCY IN THE EUROPEAN BANKING SYSTEMS: A THREE-STAGE ANALYSIS

Increased competition and the attempts of European banks to increase their presence in other markets may have affected the efficiency and credit risk. The first of this aspects is based on the incentive to the banks to reduce cost in order to gain in competitiveness. The second is associated to their lack of knowledge of such markets and/or acceptance of a higher risk in order to increase their market share. Despite the importance of these aspects, banking literature has usually analyzed the effects of competition on the efficiency of banking systems without considering these aspects. The few studies that attempt to obtainrisk adjusted efficiency measures do not consider that part of the risk is due to exogenous circumstances. This article proposes a new three stage sequential technique, based on theDEA model and on the decomposition of risk into its internal and external components, for obtaining efficiency measures adjusted for risk and environment. It is seen that the technique allows the use of any existing technique of incorporation of environmental variables in DEA analysis. El incremento de la competencia y los intentos de los bancos europeos por aumentar supresencia en otros mercados pueden haber afectado tanto al nivel de eficiencia bancaria como alriesgo de crédito. El primero de los aspectos se fundamenta en el incentivo que tienen los bancosa reducir los costes para ganar competitividad. El segundo, está asociado a la ausencia decompetencia en tales mercados y/o a la aceptación de niveles mayores de riesgo con el fin deincrementar la cuota de mercado. A pesar de la importancia de estos aspectos, la literaturabancaria tradicionalmente ha analizado los efectos de la competencia en la eficiencia de lossistemas bancarios sin considerar estos efectos sobre el riesgo. Los escasos estudios queintentan obtener medidas de eficiencia ajustadas por el riesgo no consideran que parte del riesgoes debido a circunstancias exógenas. Este artículo propone una nueva técnica secuenciencial entres etapas, basado en el modelo DEA y en la descomposición del riesgo en sus componentesexterno e interno, para la obtención de medidas de eficiencia ajustadas por el riesgo y elambiente. La técnica se aplica al análisis de la eficiencia de los sistemas bancarios europeos ypermite el uso de cualquiera de las tecnicas existentes para la incorporación de variablesambientales en un contexto DEA.DEA, riesgo de crédito, morosidad, eficiencia, variables ambientales DEA, credit risk, bad loans, efficiency, environmental variables.

An empirical study of comparing DEA and SFA methods to measure hospital units’ efficiency

Frontier techniques have been used to measure healthcare provider efficiency in hundreds of published studies. Although these methods have the potential to be useful to decision makers, their utility is limited by both methodological questions concerning their application. The aim of this paper is to examine the data envelopment analysis (DEA) and stochastic frontier analysis (SFA) results in order to facilitate a common understanding about the adequacy of these methods, defining any differences in healthcare efficiency estimation. A two-stage bootstrap DEA method and the Translog formula of the SFA were performed. Multi-inputs and multi-outputs were used in both of the approaches assuming two scenarios either including environmental variables or not. The introduced environmental variables were regressed with the bias corrected estimations derived from the first step of the two-stage bootstrap DEA model. In the Translog SFA functional form, these variables were introduced as shifted. Thirty-two Greek public hospital units constitute the sample. The main output of the analysis was that the efficiency scores increased with the incorporation of environmental variables in the SFA model, with the average efficiency score to become from 0.85 to 0.89. However, DEA and SFA were found to yield divergent efficiency estimates due to many factors such as the nature of the environmental variables, the measurement error and other random factors. Environmental variables being hospital status and geographical position were found significantly correlating with inefficiency, while patient mobility was not found strongly correlating. The analysis concludes that there is a need for careful attention by stakeholders since the nature of the data and its availability influence the measurement of the efficiency and thus it is necessary to be specific when choosing the appropriate mathematical form in order to test the behavior which generates the data

Law and Order Efficiency Measurement – A Literature Review

This paper surveys the recent literature on law and order efficiency measurement. Law and order services include the services provided by the police, by the prison system and also by the judicial system (“the courts”). Key concepts prevalent in the efficiency measurement literature are presented. Decision making units most often found in the efficiency evaluation literature on law and order are charcterized. Inputs used by these units, and output measurement are examined and control and environment variables that explain or condition efficiency are dealt with. Methods of efficiency measurement are shortly presented. A synthesis of the main results and a short description of two important international databases on law and order are included.efficiency measurement; law and economics; government expenditures.

Study on the efficiency and effectiveness of public spending on tertiary education

The purpose of the study is to assess efficiency in public tertiary education systems across EU countries plus Japan and the US with semi-parametric methods and stochastic frontier analysis.  The study identifies a core group of efficient countries. A good quality secondary system, output-based funding rules, institutions' independent evaluation and staff policy autonomy are positively related to efficiency.  Moreover, the study provides evidence that public spending on tertiary education is more effective in what concerns labour productivity growth and employability when it is coupled with efficiency.Efficiency, effectiveness, public spending, tertiary education, Universities, Study on the efficiency and effectiveness of public spending on tertiary education

PRODUCTIVITY AND EFFICIENCY DIFFERENCE AMONG KENTUCKY GRAIN FARMS

This paper attempts to estimate productivity and efficiency for Kentucky grain farms by applying a two-stage Date Envelopment Analysis (DEA) and DEA-based Malmquist method. The study covers the years 1999-2015. Also, productivity and efficiency testing hypotheses among different farm sizes and years are estimated. In the first step, productivity and efficiency indices are estimated through deterministic DEA. In the second stage, a panel regression is run with exogenous variables to explain the productivity and efficiency variation. In general small farms were found to be the least scale efficient compared to mid-sized and large farms, even though the results show overall productivity gain and technological improvements during the study. Therefore, small farms need to diversify their scope to survive due to a lack of scale efficiency