Explaining efficiency in municipal services providers

This paper considers the provision of some important municipal services and applies the non-parametric double bootstrap Simar and Wilson (J Econ 136(1):31–64, 2007 ) model based on a truncated-regression to estimate the effect of a group of relevant factors, which include the political sign of the governing party and the type of management, on robust DEA (Data Envelopment Analysis) estimates. Previous conditions, like separability, must hold for meaningful first- stage efficiency estimates and second-stage regression. After some confusion in the literature, Simar and Wilson (J Prod Anal 36(2):205–218, 2011b ) clarify that their work of 2007 actually defines a statistical model where truncated (but not censored, i.e., Tobit, not Ordinary Least Square) regression yields a consistent estimation of model features. They demonstrate that conventional, likelihood-based approaches to inference are invalid, and they develop a bootstrap approach that yields valid inference in second stage regressions when these are appropriate. The results reveal a significant relation between efficiency and all the variables analysed and that municipalities governed by progressive parties are more efficient. Copyright Springer Science+Business Media New York 2014