Equivalent standard DEA models to provide super-efficiency scores

DEA super-efficiency models were introduced originally with the objective of providing a tie-breaking procedure for ranking units rated as efficient in conventional DEA models. This objective has been expanded to include sensitivity analysis, outlier identification and inter-temporal analysis. However, not all units rated as efficient in conventional DEA models have feasible solutions in DEA super-efficiency models. We propose a new super-efficiency model that (a) generates the same super-efficiency scores as conventional super-efficiency models for all units having a feasible solution under the latter, and (b) generates a feasible solution for all units not having a feasible solution under the latter. Empirical examples are provided to compare the two super-efficiency models

A reasonable benchmarking frontier using DEA : an incentive scheme to improve efficiency in public hospitals

There exists research relating management concepts with productivity measurement methods that offers useful solutions for improving management control in the public sector. Within this sphere, we connect agency theory with efficiency analysis and describe how to define an incentives scheme that can be applied in the public sector to monitor the efficiency and productivity of managers. To fulfill the main objective of this research, we propose an iterative process for determining what we define as a ‘reasonable frontier’, a concept that provides the foundation required to establish the incentive scheme for the managers. Our ‘reasonable frontier’ has the following properties: i) it detects the presence of outliers, ii) it proposes a procedure to establish the influence introduced by extreme observations, and iii) it sorts out the problem of data masking. The proposed method is applied to a sample of hospitals taken from the public network of the Spanish health service. The results obtained confirm the applicability of the proposal made. Summing up, we define and apply a useful method, combining aspects of agency theory and efficiency analysis, which is of interest to those public authorities trying to design effective incentive schemes which influence the decision making of the public managers

A reasonable benchmarking frontier using DEA : an incentive scheme to improve efficiency in public hospitals

There exists research relating management concepts with productivity measurement methods that offers useful solutions for improving management control in the public sector. Within this sphere, we connect agency theory with efficiency analysis and describe how to define an incentives scheme that can be applied in the public sector to monitor the efficiency and productivity of managers. To fulfill the main objective of this research, we propose an iterative process for determining what we define as a ‘reasonable frontier’, a concept that provides the foundation required to establish the incentive scheme for the managers. Our ‘reasonable frontier’ has the following properties: i) it detects the presence of outliers, ii) it proposes a procedure to establish the influence introduced by extreme observations, and iii) it sorts out the problem of data masking. The proposed method is applied to a sample of hospitals taken from the public network of the Spanish health service. The results obtained confirm the applicability of the proposal made. Summing up, we define and apply a useful method, combining aspects of agency theory and efficiency analysis, which is of interest to those public authorities trying to design effective incentive schemes which influence the decision making of the public managers.

Assessing the Efficiency of Mass Transit Systems in the United States

Frustrated with increased parking problems, unstable gasoline prices, and stifling traffic congestion, a growing number of metropolitan city dwellers consider utilizing the mass transit system. Reflecting this sentiment, a ridership of the mass transit system across the United States has been on the rise for the past several years. A growing demand for the mass transit system, however, necessitates the expansion of service offerings, the improvement of basic infrastructure/routes, and the additional employment of mass transit workers, including drivers and maintenance crews. Such a need requires the optimal allocation of financial and human resources to the mass transit system in times of shrinking budgets and government downsizing. Thus, the public transit authority is faced with the dilemma of “doing more with less.” That is to say, the public transit authority needs to develop a “lean” strategy which can maximize transit services with the minimum expenses. To help the public transit authority develop such a lean strategy, this report identifies the best-in-class practices in the U.S. transit service sector and proposes transit policy guidelines that can best exploit lean principles built upon best-in-class practices

The Performance of German Water Utilities: A (Semi)-Parametric Analysis

Germany's water supply industry is characterized by a multitude of utilities and widely diverging prices, possibly resulting from structural differences beyond the control of firms' management, but also from inefficiencies. In this article we use Data Envelopment Analysis and Stochastic Frontier Analysis to determine the utilities' technical efficiency scores based on cross-sectional data from 373 public and private water utilities in 2006. We find large differences in technical efficiency scores even after accounting for significant structural variables like network density, share of groundwater usage and water losses.Water supply, technical efficiency, data envelopment analysis, stochastic frontier analysis, structural variables, bootstrapped truncated regression

Some Determinants of Intermediate Local Governments' Spending Efficiency: The Case of French Départements

Efforts undertaken by France to restructure the allocation of governmental competencies increased the importance of subnational governments by transferring additional tasks. This paper analyzes the efficiency of public spending on an intermediate government level for a sample of 96 départements in metropolitan France in 2008. Spending efficiency is measured using Data Envelopment Analysis (DEA). Results indicate significant room for improvements and detect spending inefficiencies averaging between 10 and 22 percent, depending on model specification. To explain efficiency, a bootstrapped truncated regression, following Simar and Wilson (2007), is applied. The second-stage regression shows that efficiency is also determined by exogenous factors and identifies the distance to the national capital, inhabitants' income and the share of inhabitants of an age over 65 as significant determinants of efficiency.Intermediate government spending efficiency, nonparametric efficiency analysis, bootstrapped truncated regression

Research Efficiency in Manufacturing: An Application of DEA at the Industry Level

This paper analyzes research efficiency at the industry level in manufacturing for 13 European member and four nonmember countries during 2000 and 2004. A unique dataset was compiled that matches patent applications at the European Patent Office (EPO) to industry-specific R&D inputs from EU KLEMS. We find that Germany, the United States, and Denmark have the highest efficiency scores on average in total manufacturing. The main industries that are at the technology frontier are those involved in electrical and optical equipment and machinery. Separate frontier estimations for these industries, conducted without the constraint of a constant technology frontier, provide additional support for our results.R&D efficiency, industry level, data envelopment analysis, manufacturing