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On Measuring Aggregate "Social Efficiency."

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  • Ravallion, Martin

Abstract

Cross-country comparisons of social indicators controlling for income and/or social spending have been widely used to measure and explain "social efficiency," analogously to "technical efficiency" in production. The article argues that these methods are clouded in ambiguities about what is being measured. Standard methods of measuring technical efficiency require assumptions that are unlikely to hold for social indicators. In the context of a simple parametric model of life expectancy, conditions are identified under which there will be a systematic pattern of bias in estimates of efficient public health spending.

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Bibliographic Info

Article provided by University of Chicago Press in its journal Economic Development and Cultural Change.

Volume (Year): 53 (2005)
Issue (Month): 2 (January)
Pages: 273-92

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Handle: RePEc:ucp:ecdecc:y:2005:v:53:i:2:p:273-92

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Web page: http://www.journals.uchicago.edu/EDCC/

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References

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  1. António Afonso & Miguel St. Aubyn, 2004. "Non-parametric Approaches to Education and Health Expenditure Efficiency in OECD Countries," Working Papers 2004/01, Department of Economics at the School of Economics and Management (ISEG), Technical University of Lisbon..
  2. Sen, Amartya, 1981. "Public Action and the Quality of Life in Developing Countries," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 43(4), pages 287-319, November.
  3. Ludger Schuknecht & Antonio Afonso & Vito Tanzi, 2003. "Public sector efficiency: an international comparison," Working Paper Series 242, European Central Bank.
  4. Jalan, Jyotsna & Ravallion, Martin, 2001. "Does piped water reduce diarrhea for children in rural India ?," Policy Research Working Paper Series 2664, The World Bank.
  5. Kakwani, N., 1993. "Performance in living standards : An international comparison," Journal of Development Economics, Elsevier, vol. 41(2), pages 307-336, August.
  6. Sudhir Anand & Martin Ravallion, 1993. "Human Development in Poor Countries: On the Role of Private Incomes and Public Services," Journal of Economic Perspectives, American Economic Association, vol. 7(1), pages 133-150, Winter.
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  8. Skinner, Jonathan, 1994. "What do stochastic frontier cost functions tell us about inefficiency?," Journal of Health Economics, Elsevier, vol. 13(3), pages 323-328, October.
  9. Bidani, Benu & Ravallion, Martin, 1995. "Decomposing social indicators using distributional data," Policy Research Working Paper Series 1487, The World Bank.
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  11. Ravallion, Martin, 2001. "On Assessing the Efficiency of the Welfare State: A Comment," Kyklos, Wiley Blackwell, vol. 54(1), pages 115-23.
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  14. Bruce Hollingsworth & John Wildman, 2003. "The efficiency of health production: re-estimating the WHO panel data using parametric and non-parametric approaches to provide additional information," Health Economics, John Wiley & Sons, Ltd., vol. 12(6), pages 493-504.
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  17. Cazals, Catherine & Florens, Jean-Pierre & Simar, Léopold, 2002. "Nonparametric Frontier Estimation: A Robust Approach," Open Access publications from University of Toulouse 1 Capitole http://neeo.univ-tlse1.fr, University of Toulouse 1 Capitole.
  18. Rafik Baccouche & Mokhtar Kouki, 2003. "Stochastic Production Frontier and Technical Inefficiency: A Sensitivity Analysis," Econometric Reviews, Taylor and Francis Journals, vol. 22(1), pages 79-91.
  19. Park, B.U. & Simar, L. & Weiner, Ch., 2000. "The Fdh Estimator For Productivity Efficiency Scores," Econometric Theory, Cambridge University Press, vol. 16(06), pages 855-877, December.
  20. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
  21. Konstantinos Giannakas & Kien Tran & Vangelis Tzouvelekas, 2003. "Predicting technical effciency in stochastic production frontier models in the presence of misspecification: a Monte-Carlo analysis," Applied Economics, Taylor and Francis Journals, vol. 35(2), pages 153-161.
  22. Anand, Sudhir & Hanson, Kara, 1997. "Disability-adjusted life years: a critical review," Journal of Health Economics, Elsevier, vol. 16(6), pages 685-702, December.
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Citations

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Cited by:
  1. Stefano Paternostro & Anand Rajaram & Erwin R. Tiongson, 2007. "How Does the Composition of Public Spending Matter?," Oxford Development Studies, Taylor and Francis Journals, vol. 35(1), pages 47-82.
  2. Herrera, Santiago & Pang, Gaobo, 2005. "Efficiency of public spending in developing countries : an efficiency frontier approach," Policy Research Working Paper Series 3645, The World Bank.
  3. Martin Binder & Tom Broekel, 2011. "Applying a Non-parametric Efficiency Analysis to Measure Conversion Efficiency in Great Britain," Journal of Human Development and Capabilities, Taylor and Francis Journals, vol. 12(2), pages 257-281.
  4. Mattos, Enlinson Henrique Carvalho de & Rocha, Fabiana & Novaes, Lucas & Arvate, Paulo Roberto & Orellano, Verônica Inês Fernandez, 2010. "Economias de escala na oferta de serviços públicos de saúde: um estudo para os municípios paulistas," Textos para discussão 269, Escola de Economia de São Paulo, Getulio Vargas Foundation (Brazil).
  5. Rouselle Lavado & Emilyn Cabanda, 2009. "The efficiency of health and education expenditures in the Philippines," Central European Journal of Operations Research, Springer, vol. 17(3), pages 275-291, September.
  6. Estache, Antonio & Gonzalez, Marianela & Trujillo,Lourdes, 2007. "Government expenditures on education, health, and infrastructure : a naive look at levels, outcomes, and efficiency," Policy Research Working Paper Series 4219, The World Bank.
  7. TAUSCH, Arno, 2008. "On the world market trajectory of 21 major book publishing companies in globalization and European studies in 100+ countries. From “Amsterdam University Press” via “Palgrave” and “Nova Scien," MPRA Paper 9613, University Library of Munich, Germany.
  8. Santiago Herrera & Gaobo Pang, 2006. "How Efficient is Public Spending in Education?," ENSAYOS SOBRE POLÍTICA ECONÓMICA, BANCO DE LA REPÚBLICA - ESPE.

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