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Long- and Short-Term Cost Efficiency Frontier Evaluation: Evidence from Spanish Local Governments

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  • Victor M. Giménez
  • Diego Prior

Abstract

This paper analyses the efficiency of Spanish local governments using non-convex frontier methods. More specifically, it analyses the total cost inefficiency and proposes its decomposition into three additive components: short-term variable cost inefficiency; capacity utilisation of fixed inputs; and scale inefficiency. The second and third components correspond to the long-term cost efficiency notion. The proposition is applied to a sample of Spanish municipal councils (municipalities with over 2,000 inhabitants located in Catalonia, the Spanish north-eastern region). The results confirm the existence of significant cost inefficiency coefficients related to both the long and short term. Copyright 2007 Institute for Fiscal Studies.

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Bibliographic Info

Article provided by Institute for Fiscal Studies in its journal Fiscal Studies.

Volume (Year): 28 (2007)
Issue (Month): 1 (03)
Pages: 121-139
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Handle: RePEc:ifs:fistud:v:28:y:2007:i:1:p:121-139

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Cited by:
  1. Maria Teresa Balaguer-Coll & Diego Prior & Emili Tortosa-Ausina, . "Devolution Dynamics of Spanish Local Government," Working Paper 201001, Department of Business Economics, Universitat Autonoma de Barcelona.
  2. Núria Bosch Roca & Marta Espasa Queralt & Antoni Mora Corral, 2010. "Citizens' control and the efficiency of local public services," Working Papers 2010/23, Institut d'Economia de Barcelona (IEB).
  3. P. Bönisch & Peter Haug & A. Illy & L. Schreier, 2011. "Municipality Size and Efficiency of Local Public Services: Does Size Matter?," IWH Discussion Papers 18, Halle Institute for Economic Research.

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