Efficiency effects of agricultural economics research in the United States

Allocations of research funds across programs are often made for efficiency reasons. Social science research is shown to have small, lagged but significant effects on U.S. agricultural efficiency when public agricultural R&D and extension are simultaneously taken into account. Farm management and marketing research variables are used to explain variations in estimates of allocative and technical efficiency using a Bayesian approach that incorporates stylized facts concerning lagged research impacts in a way that is less restrictive than popular polynomial distributed lags. Results are reported in terms of means and standard deviations of estimated probability distributions of parameters and long-run total multipliers. Extension is estimated to have a greater impact on both allocative and technical efficiency than either R&D or social science research.

A comparative assessment of performance and productivity of health centres in Seychelles

Purpose - The purpose of this paper is to measure the technical and scale efficiency of health centres; to evaluate changes in productivity; and to highlight possible policy implications of the results for policy makers. Design/methodology/approach - Data envelopment analysis (DEA) is employed to assess the technical and scale efficiency, and productivity change over a four-year period among 17 public health centres. Findings - During the period of study, the results suggest that the public health centres in Seychelles have exhibited mean overall or technical efficiency of above 93 per cent. It was also found that the overall productivity increased by 2.4 per cent over 2001-2004. Research limitations/implications - Further research can be undertaken to gather data on the prices of the various inputs to facilitate an estimation of the allocative efficiency of clinics. If such an exercise were to be undertaken, researchers may also consider collecting data on quantities and prices of paramedical, administrative and support staff to ensure that the analysis is more comprehensive than the study reported in this paper. Institutionalization of efficiency monitoring would help to enhance further the already good health sector stewardship and governance. Originality/value - This paper provides new empirical evidence on a four-year trend in the efficiency and productivity of health centres in Seychelles. © Emerald Group Publishing Limited.

A performance assessment method for hospitals:the case of municipal hospitals in Angola

Over 60% of the recurrent budget of the Ministry of Health (MoH) in Angola is spent on the operations of the fixed health care facilities (health centres plus hospitals). However, to date, no study has been attempted to investigate how efficiently those resources are used to produce health services. Therefore the objectives of this study were to assess the technical efficiency of public municipal hospitals in Angola; assess changes in productivity over time with a view to analyzing changes in efficiency and technology; and demonstrate how the results can be used in the pursuit of the public health objective of promoting efficiency in the use of health resources. The analysis was based on a 3-year panel data from all the 28 public municipal hospitals in Angola. Data Envelopment Analysis (DEA), a non-parametric linear programming approach, was employed to assess the technical and scale efficiency and productivity change over time using Malmquist index.The results show that on average, productivity of municipal hospitals in Angola increased by 4.5% over the period 2000-2002; that growth was due to improvements in efficiency rather than innovation. © 2008 Springer Science+Business Media, LLC.

Developing a decomposable measure of profit efficiency using DEA

In for-profit organizations efficiency measurement with reference to the potential for profit augmentation is particularly important as is its decomposition into technical, and allocative components. Different profit efficiency approaches can be found in the literature to measure and decompose overall profit efficiency. In this paper, we highlight some problems within existing approaches and propose a new measure of profit efficiency based on a geometric mean of input/output adjustments needed for maximizing profits. Overall profit efficiency is calculated through this efficiency measure and is decomposed into its technical and allocative components. Technical efficiency is calculated based on a non-oriented geometric distance function (GDF) that is able to incorporate all the sources of inefficiency, while allocative efficiency is retrieved residually. We also define a measure of profitability efficiency which complements profit efficiency in that it makes it possible to retrieve the scale efficiency of a unit as a component of its profitability efficiency. In addition, the measure of profitability efficiency allows for a dual profitability interpretation of the GDF measure of technical efficiency. The concepts introduced in the paper are illustrated using a numerical example.

Profitability of a sample of Portuguese bank branches and its decomposition into technical and allocative components

The efficiency literature, both using parametric and non-parametric methods, has been focusing mainly on cost efficiency analysis rather than on profit efficiency. In for-profit organisations, however, the measurement of profit efficiency and its decomposition into technical and allocative efficiency is particularly relevant. In this paper a newly developed method is used to measure profit efficiency and to identify the sources of any shortfall in profitability (technical and/or allocative inefficiency). The method is applied to a set of Portuguese bank branches first assuming long run and then a short run profit maximisation objective. In the long run most of the scope for profit improvement of bank branches is by becoming more allocatively efficient. In the short run most of profit gain can be realised through higher technical efficiency. © 2003 Elsevier B.V. All rights reserved.

A cost Malmquist productivity index

This paper develops a productivity index applicable when producers are cost minimisers and input prices are known. The index is inspired by the Malmquist index as extended to productivity measurement. The index developed here is defined in terms of input cost rather than input quantity distance functions. Hence, productivity change is decomposed into overall efficiency and cost technical change. Furthermore, overall efficiency change is decomposed into technical and allocative efficiency change and cost technical change into a part capturing shifts of input quantities and shifts of relative input prices. These decompositions provide a clearer picture of the root sources of productivity change. They are illustrated here in a sample of hospitals; results are computed using non-parametric mathematical programming. © 2003 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.

Three essays on hospital efficiency

This dissertation analyzes hospital efficiency using various econometric techniques. The first essay provides additional and recent evidence to the presence of contract management behavior in the U.S. hospital industry. Unlike previous studies, which focus on either an input-demand equation or the cost function of the firm, this paper estimates the two jointly using a system of nonlinear equations. Moreover, it addresses the longitudinal problem of institutions adopting contract management in different years, by creating a matched control group of non-adopters with the same longitudinal distribution as the group under study. The estimation procedure then finds that labor, and not capital, is the preferred input in U.S. hospitals regardless of managerial contract status. With institutions that adopt contract management benefiting from lower labor inefficiencies than the simulated non-contract adopters. These results suggest that while there is a propensity for expense preference behavior towards the labor input, contract managed firms are able to introduce efficiencies over conventional, owner controlled, firms. Using data for the years 1998 through 2007, the second essay investigates the production technology and cost efficiency faced by Florida hospitals. A stochastic frontier multiproduct cost function is estimated in order to test for economies of scale, economies of scope, and relative cost efficiencies. The results suggest that small-sized hospitals experience economies of scale, while large and medium sized institutions do not. The empirical findings show that Florida hospitals enjoy significant scope economies, regardless of size. Lastly, the evidence suggests that there is a link between hospital size and relative cost efficiency. The results of the study imply that state policy makers should be focused on increasing hospital scale for smaller institutions while facilitating the expansion of multiproduct production for larger hospitals. The third and final essay employs a two staged approach in analyzing the efficiency of hospitals in the state of Florida. In the first stage, the Banker, Charnes, and Cooper model of Data Envelopment Analysis is employed in order to derive overall technical efficiency scores for each non-specialty hospital in the state. Additionally, input slacks are calculated and reported in order to identify the factors of production that each hospital may be over utilizing. In the second stage, we employ a Tobit regression model in order to analyze the effects a number of structural, managerial, and environmental factors may have on a hospital’s efficiency. The results indicated that most non-specialty hospitals in the state are operating away from the efficient production frontier. The results also indicate that the structural make up, managerial choices, and level of competition Florida hospitals face have an impact on their overall technical efficiency.

Irish Credit Unions: Differential Regulation based on Business Model Complexity

This study examines the business model complexity of Irish credit unions using a latent class approach to measure structural performance over the period 2002 to 2013. The latent class approach allows the endogenous identification of a multi-class framework for business models based on credit union specific characteristics. The analysis finds a three class system to be appropriate with the multi-class model dependent on three financial viability characteristics. This finding is consistent with the deliberations of the Irish Commission on Credit Unions (2012) which identified complexity and diversity in the business models of Irish credit unions and recommended that such complexity and diversity could not be accommodated within a one size fits all regulatory framework. The analysis also highlights that two of the classes are subject to diseconomies of scale. This may suggest credit unions would benefit from a reduction in scale or perhaps that there is an imbalance in the present change process. Finally, relative performance differences are identified for each class in terms of technical efficiency. This suggests that there is an opportunity for credit unions to improve their performance by using within-class best practice or alternatively by switching to another class.

Portuguese airport efficiency analysis: the case study of Oporto

The Oporto Airport located in the northern region in Porto city is crucial because is the only one located in the northern region. This airport had an increasing in number of passengers, sales revenue and accumulated investment during the last two decades, principally after the introduction and the operation of the Low Cost Companies since 2004 to the present. In order to determine if the last changes had an impact in the competitiveness of this airport, the main aims is to analise the evolution of values of the technical efficiency and equate the results before and after the introduction of the LCCs in this airport. The methodology uses the Data Envelopment Analysis. Results show that the Oporto Airport efficiency increases highly after the introduction of LCCs since 2004. The main conclusions suggest the importance of the introduction of LCCs in the increasing efficiency of the Oporto Airport and the potential relation with tourism development in this region, but more strong studies are needed.

Assessing public spending efficiency in 20 OECD countries

Mestrado em Economia Monetária e Financeira

Assessing public spending efficiency in 20 OECD countries

This study follows the framework of Afonso, Schuknecht, and Tanzi (2005), aiming to look at the public expenditure of 20 OECD countries for the period 2009-2013, from the per- spective of efficiency and assess if these developed countries are performing efficiently compared to each other. Public Sector Performance (PSP) and Public Sector Efficiency (PSE) indicators were constructed and Data Envelopment Analysis was conducted. The results show that the only country that performed on the efficiency frontier is Switzerland. The average input-oriented efficiency score is equal to 0.732. That is, on average countries could have reduced the level of public expenditure by 26.8% and still achieved the same level of public performance. The average output-oriented efficiency score is 0.769 denoting that on average the sample countries could have increased their performance by 23.1% by employing the same level of public expenditure.

Operational performance of low-cost carriers and international airlines : New evidence using a bootstrap truncated regression

Between 2001 and 2005, the US airline industry faced financial turmoil. At the same time, the European airline industry entered a period of substantive deregulation. This period witnessed opportunities for low-cost carriers to become more competitive in the market as a result of these combined events. To help assess airline performance in the aftermath of these events, this paper provides new evidence of technical efficiency for 42 national and international airlines in 2006 using the data envelopment analysis (DEA) bootstrap approach first proposed by Simar and Wilson (J Econ, 136:31-64, 2007). In the first stage, technical efficiency scores are estimated using a bootstrap DEA model. In the second stage, a truncated regression is employed to quantify the economic drivers underlying measured technical efficiency. The results highlight the key role played by non-discretionary inputs in measures of airline technical efficiency.

Optimal allocation of water in village irrigation systems of Sri Lanka

This PhD study examines whether water allocation becomes more productive when it is re-allocated from 'low' to 'high' efficient alternative uses in village irrigation systems (VISs) in Sri Lanka. Reservoir-based agriculture is a collective farming economic activity, which inter-sectoral allocation of water is assumed to be inefficient due to market imperfections and weak user rights. Furthermore, the available literature shows that a „head-tail syndrome. is the most common issue for intra-sectoral water management in „irrigation. agriculture. This research analyses the issue of water allocation by using primary data collected from two surveys of 460 rice farmers and 325 fish farming groups in two administrative districts in Sri Lanka. Technical efficiency estimates are undertaken for both rice farming and culture-based fisheries (CBF) production. The equi-marginal principle is applied for inter and intra-sectoral allocation of water. Welfare benefits of water re-allocation are measured through consumer surplus estimation. Based on these analyses, the overall findings of the thesis can be summarised as follows. The estimated mean technical efficiency (MTE) for rice farming is 73%. For CBF production, the estimated MTE is 33%. The technical efficiency distribution is skewed to the left for rice farming, while it skewed to the right for CBF production. The results show that technical efficiency of rice farming can be improved by formalising transferability of land ownership and, therefore, water user rights by enhancing the institutional capacity of Farmer Organisations (FOs). Other effective tools for improving technical efficiency of CBF production are strengthening group stability of CBF farmers, improving the accessibility of official consultation, and attracting independent investments. Inter-sectoral optimal allocation shows that the estimated inefficient volume of water in rice farming, which can be re-allocated for CBF production, is 32%. With the application of successive policy instruments (e.g., a community transferable quota system and promoting CBF activities), there is potential for a threefold increase in marginal value product (MVP) of total reservoir water in VISs. The existing intra-sectoral inefficient volume of water use in tail-end fields and head-end fields can potentially be removed by reducing water use by 10% and 23% respectively and re-allocating this to middle fields. This re-allocation may enable a twofold increase in MVP of water used in rice farming without reducing the existing rice output, but will require developing irrigation practices to facilitate this re-allocation. Finally, the total productivity of reservoir water can be increased by responsible village level institutions and primary level stakeholders (i.e., co-management) sharing responsibility of water management, while allowing market forces to guide the efficient re-allocation decisions. This PhD has demonstrated that instead of farmers allocating water between uses haphazardly, they can now base their decisions on efficient water use with a view to increasing water productivity. Such an approach, no doubt will enhance farmer incomes and community welfare.