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Measuring the efficiency of public services: the limits of analysis

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  • Peter C. Smith
  • Andrew Street

Abstract

Policy makers are increasingly seeking to develop overall measures of the effi-ciency of public service organizations. For that, the use of 'off-the-shelf' statistical tools such as data envelopment analysis and stochastic frontier analysis have been advocated as tools to measure organizational efficiency. The analytical sophistication of such methods has reached an advanced stage of development. We discuss the context within which such models are deployed, their underlying assumptions and their usefulness for a regulator of public services. Four specific model building issues are discussed: the weights that are attached to public service outputs; the specification of the statistical model; the treatment of environmental influences on performance; the treatment of dynamic effects. The paper concludes with recommendations for policy makers and researchers on the development and use of efficiency measurement techniques. Copyright 2005 Royal Statistical Society.

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Bibliographic Info

Article provided by Royal Statistical Society in its journal Journal of the Royal Statistical Society Series A.

Volume (Year): 168 (2005)
Issue (Month): 2 ()
Pages: 401-417

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Handle: RePEc:bla:jorssa:v:168:y:2005:i:2:p:401-417

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Cited by:
  1. Helen Simpson, 2007. "Productivity in Public Services," The Centre for Market and Public Organisation 07/164, Department of Economics, University of Bristol, UK.
  2. William Prieto Bustos & Carlos Alberto Barreto Nieto & Henry Antonio Mendoza, 2012. "Eficiencia Técnica Del Sector Público," DOCUMENTOS DE TRABAJO 010351, UNIVERSIDAD CATOLICA DE COLOMBIA.
  3. Sharon Hadad & Yossi Hadad & Tzahit Simon-Tuval, 2013. "Determinants of healthcare system’s efficiency in OECD countries," The European Journal of Health Economics, Springer, vol. 14(2), pages 253-265, April.
  4. Zuzana Kučerová, 2012. "Measuring of Efficiency in the Public and Private Sector – Current Research Approaches," Český finanční a účetní časopis, University of Economics, Prague, vol. 2012(2), pages 110-125.
  5. Collier, Trevor & Johnson, Andrew L. & Ruggiero, John, 2011. "Technical efficiency estimation with multiple inputs and multiple outputs using regression analysis," European Journal of Operational Research, Elsevier, vol. 208(2), pages 153-160, January.
  6. Troels Kristensen & Peter Bogetoft & Kjeld Pedersen, 2010. "Potential gains from hospital mergers in Denmark," Health Care Management Science, Springer, vol. 13(4), pages 334-345, December.
  7. Badunenko, Oleg & Henderson, Daniel J. & Kumbhakar, Subal C., 2011. "When, where and how to perform efficiency estimation," MPRA Paper 33467, University Library of Munich, Germany.
  8. Ricardo AGUADO & Jabier MARTINEZ & Miguel Angel LARRINAGA, 2011. "REGIONAL R&D&i PRODUCTIVITY IN EUROPE. IDENTIFYING REGIONAL TYPOLOGIES AND POLICY RECOMMENDATIONS," ERSA conference papers ersa10p412, European Regional Science Association.
  9. Alexandre Marinho & Simone de Souza Cardoso & Vivian Vicente de Almeida, 2009. "Brasil e OCDE: Avaliação da Eficiência em Sistemas de Saúde," Discussion Papers 1370, Instituto de Pesquisa Econômica Aplicada - IPEA.
  10. Silvio Borner & Simeon Hofmänner, 2006. "Eine Untersuchung der Effizienz öffentlicher Leistungen der Schweizer Kantone und Gemeinden," Working papers 2006/08, Faculty of Business and Economics - University of Basel.
  11. Nicholas Longford & D. B. Rubin, 2006. "Performance assessment and league tables. Comparing like with like," Economics Working Papers 994, Department of Economics and Business, Universitat Pompeu Fabra.
  12. Kim-Huong Nguyen & Tim Coelli, 2009. "Quantifying the effects of modelling choices on hospital efficiency measures: A meta-regression analysis," CEPA Working Papers Series WP072009, School of Economics, University of Queensland, Australia.
  13. Bruce Hollingsworth & Andrew Street, 2006. "The market for efficiency analysis of health care organisations," Health Economics, John Wiley & Sons, Ltd., vol. 15(10), pages 1055-1059.
  14. John Buckell & Andrew Smith & Roberta Longo & David Holland, 2013. "Health inefficiency and unobservable heterogeneity - empirical evidence from pathology services in the UK National Health Service," Working Papers 1307, Academic Unit of Health Economics, Leeds Institute of Health Sciences, University of Leeds.
  15. Hauck, Katharina & Street, Andrew, 2006. "Performance assessment in the context of multiple objectives: A multivariate multilevel analysis," Journal of Health Economics, Elsevier, vol. 25(6), pages 1029-1048, November.
  16. Annika Frohloff, 2007. "Cost and Technical Efficiency of German Hospitals – A Stochastic Frontier Analysis," Ruhr Economic Papers 0002, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.

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