Productivity and price performance in the privatized water and sewerage companies of England and Wales

After its privatization in 1989, the water and sewerage industry of England and Wales faced a new regulatory régime and implemented a substantial capital investment program aimed at improving water and environmental standards. A new RPI + K regulatory pricing system was designed to compensate the industry for its increased capital costs, encourage increased efficiency, and maintain fair prices for customers. This paper evaluates how successful privatization and the resulting system of economic regulation has been. Estimates of productivity growth, derived with quality adjusted output indices, suggest that despite reductions in labor usage, total factor productivity growth has not improved since privatization. Moreover, total price performance indices reveal that increases in output prices have outstripped increases in input costs, a trend which is largely responsible for the increase in economic profits that has occurred since privatization. * We would like to thank Emmanuel Thanassoulis, Joshy Easaw, Jim Love, John Sawkins, and an anonymous referee for helpful comments on earlier drafts of this paper. The usual disclaimer applies.

Improving envelopment in data envelopment analysis

Data envelopment analysis defines the relative efficiency of a decision making unit (DMU) as the ratio of the sum of its weighted outputs to the sum of its weighted inputs allowing the DMUs to freely allocate weights to their inputs/outputs. However, this measure may not reflect a DMU's true efficiency as some inputs/outputs may not contribute reasonably to the efficiency measure. Traditionally, to overcome this problem weights restrictions have been imposed. This paper offers a new approach to this problem where DMUs operate a constant returns to scale technology in a single input multi-output context. The approach is based on introducing unobserved DMUs, created by adjusting the output levels of certain observed relatively efficient DMUs, reflecting a combination of technical information of feasible production levels and the DM's value judgments. Its main advantage is that the information conveyed by the DM is local, with reference to a specific observed DMU. The approach is illustrated on a real life application. © 2003 Elsevier B.V. All rights reserved.

Improving envelopment in Data Envelopment Analysis under variable returns to scale

In a Data Envelopment Analysis model, some of the weights used to compute the efficiency of a unit can have zero or negligible value despite of the importance of the corresponding input or output. This paper offers an approach to preventing inputs and outputs from being ignored in the DEA assessment under the multiple input and output VRS environment, building on an approach introduced in Allen and Thanassoulis (2004) for single input multiple output CRS cases. The proposed method is based on the idea of introducing unobserved DMUs created by adjusting input and output levels of certain observed relatively efficient DMUs, in a manner which reflects a combination of technical information and the decision maker's value judgements. In contrast to many alternative techniques used to constrain weights and/or improve envelopment in DEA, this approach allows one to impose local information on production trade-offs, which are in line with the general VRS technology. The suggested procedure is illustrated using real data. © 2011 Elsevier B.V. All rights reserved.

Estimating the efficiency of healthcare facilities providing HIV/AIDS treatment in Zambia:a data envelopment approach

Zambia and many other countries in Sub-Saharan Africa face a key challenge of sustaining high levels of coverage of AIDS treatment under prospects of dwindling global resources for HIV/AIDS treatment. Policy debate in HIV/AIDS is increasingly paying more focus to efficiency in the use of available resources. In this chapter, we apply Data Envelopment Analysis (DEA) to estimate short term technical efficiency of 34 HIV/AIDS treatment facilities in Zambia. The data consists of input variables such as human resources, medical equipment, building space, drugs, medical supplies, and other materials used in providing HIV/AIDS treatment. Two main outputs namely, numbers of ART-years (Anti-Retroviral Therapy-years) and pre-ART-years are included in the model. Results show the mean technical efficiency score to be 83%, with great variability in efficiency scores across the facilities. Scale inefficiency is also shown to be significant. About half of the facilities were on the efficiency frontier. We also construct bootstrap confidence intervals around the efficiency scores.

Applications of data envelopment analysis in education

Non-parametric methods for efficiency evaluation were designed to analyse industries comprising multi-input multi-output producers and lacking data on market prices. Education is a typical example. In this chapter, we review applications of DEA in secondary and tertiary education, focusing on the opportunities that this offers for benchmarking at institutional level. At secondary level, we investigate also the disaggregation of efficiency measures into pupil-level and school-level effects. For higher education, while many analyses concern overall institutional efficiency, we examine also studies that take a more disaggregated approach, centred either around the performance of specific functional areas or that of individual employees.

Värdeflödesanalys och Data Envelopment Analysis : En fallstudie för att värdera effektiviteten hos ett logistikföretag

Companies face new challenges almost every day. In order to stay competitive, it is important that companies strive for continuous development and improvement. By describing companies through their processes it is possible to get a clear overview of the entire operation, which can contribute, to a well-established overall understanding of the company. This is a case study based on Stort AB which is a small logistics company specialized in international transportation and logistics solutions. The purpose of this study is to perform value stream mapping in order to create a more efficient production process and propose possible improvements in order to reduce processing time. After performing value stream mapping, data envelopment analysis is used to calculate how lean Stort AB is today and how lean the company can become by implementing the proposed improvements. The results show that the production process can improve efficiency by minimizing waste produced by a bad workplace layout and over-processing. The authors suggested solution is to introduce standardized processes and invest in technical instruments in order to automate the process to reduce process time. According to data envelopment analysis the business is 41 percent lean at present and may soon become 55 percent lean and finally reach an optimum 100 percent lean mode if the process is automated.

Multiplier adjustment in data envelopment analysis

V Congreso de Eficiencia y Productividad EFIUCO, Córdoba, 19-20 Mayo 2011.

Effects of an adapted physical activity program on the physical condition of elderly women: an analysis of efficiency

Background: Specific research tools and designs can assist in identifying the efficiency of physical activity in elderly women. Objectives: To identify the effects of physical activity on the physical condition of older women. Method: A one-year-long physical activity program (123 sessions) was implemented for women aged 60 years or older. Four physical assessments were conducted, in which weight, height, BMI, blood pressure, heart rate, absences, grip strength, flexibility, VO2max, and static and dynamic balance were assessed. The statistical analyses included a repeated measures analysis, both inferential (analysis of variance - ANOVA) and effect size (Cohen's d coefficient), as well as identification of the participants' efficiency (Data Envelopment Analysis - DEA). Results: Despite the observation of differences that depended on the analysis used, the results were successful in the sense that they showed that physical activity adapted to older women can effectively change the decline in physical ability associated with aging, depending on the purpose of the study. The 60-65 yrs group was the most capable of converting physical activity into health benefits in both the short and long term. The >65 yrs group took less advantage of physical activity. Conclusions: Adherence to the program and actual time spent on each type of exercise are the factors that determine which population can benefit from physical activity programs. The DEA allows the assessment of the results related to time spent on physical activity in terms of health concerns. Article registered in Clinicaltrials.gov under number NCT01558401.

Using DEA [data envelopment analysis] in benchmarking

Australian banks are currently generating huge profits but are they sustainable? NECMI AVKIRAN suggests that banks will need to scrutinise the performance of their networks to ensure future profits.