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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. Gouyette, Claudine & Pestieau, Pierre, 1999. "Efficiency of the Welfare State," Kyklos, Wiley Blackwell, vol. 52(4), pages 537-53.
  2. 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.
  3. Aturupane, Harsha & Glewwe, Paul & Isenman, Paul, 1994. "Poverty, Human Development, and Growth: An Emerging Consensus?," American Economic Review, American Economic Association, vol. 84(2), pages 244-49, May.
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  5. Jalan, Jyotsna & Ravallion, Martin, 2003. "Does piped water reduce diarrhea for children in rural India?," Journal of Econometrics, Elsevier, vol. 112(1), pages 153-173, January.
  6. 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.
  7. 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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  9. Ravallion, Martin, 2001. "On Assessing the Efficiency of the Welfare State: A Comment," Kyklos, Wiley Blackwell, vol. 54(1), pages 115-23.
  10. Rafik Baccouche & Mokhtar Kouki, 2003. "Stochastic Production Frontier and Technical Inefficiency: A Sensitivity Analysis," Econometric Reviews, Taylor & Francis Journals, vol. 22(1), pages 79-91.
  11. Bidani, Benu & Ravallion, Martin, 1997. "Decomposing social indicators using distributional data," Journal of Econometrics, Elsevier, vol. 77(1), pages 125-139, March.
  12. Cazals, Catherine & Florens, Jean-Pierre & Simar, Leopold, 2002. "Nonparametric frontier estimation: a robust approach," Journal of Econometrics, Elsevier, vol. 106(1), pages 1-25, January.
  13. G. Steven Olley & Ariel Pakes, 1992. "The Dynamics of Productivity in the Telecommunications Equipment Industry," NBER Working Papers 3977, National Bureau of Economic Research, Inc.
  14. 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.
  15. Bhalla, Surjit S & Glewwe, Paul, 1986. "Growth and Equity in Developing Countries: A Reinterpretation of the Sri Lankan Experience," World Bank Economic Review, World Bank Group, vol. 1(1), pages 35-63, September.
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  17. 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.
  18. 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 & Francis Journals, vol. 35(2), pages 153-161.
  19. Afonso, António & Schuknecht, Ludger & Tanzi, Vito, 2003. "Public sector efficiency: an international comparison," Working Paper Series 0242, European Central Bank.
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  21. António Afonso & Miguel St. Aubyn, 2004. "Non-parametric Approaches to Education and Health Expenditure Efficiency in OECD Countries," Working Papers Department of Economics 2004/01, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
  22. 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.
  23. Ruwan Jayasuriya & Quentin Wodon, 2003. "Efficiency in Reaching the Millennium Development Goals," World Bank Publications, The World Bank, number 13884, March.
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Citations

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Cited by:
  1. Martin Binder & Tom Broekel, 2009. "Applying a Nonparametric Efficiency Analysis to Measure Conversion Efficiency in Great Britain," Jena Economic Research Papers 2009-100, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  2. Santiago Herrera & Gaobo Pang, 2006. "How Efficient is Public Spending in Education?," ENSAYOS SOBRE POLÍTICA ECONÓMICA, BANCO DE LA REPÚBLICA - ESPE.
  3. 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.
  4. Temple, Jonathan R.W., 2010. "Aid and Conditionality," Handbook of Development Economics, Elsevier.
  5. Martin Binder & Tom Broekel, 2012. "Happiness No Matter the Cost? An Examination on How Efficiently Individuals Reach Their Happiness Levels," Journal of Happiness Studies, Springer, vol. 13(4), pages 621-645, August.
  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. 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).
  9. Stefano Paternostro & Anand Rajaram & Erwin R. Tiongson, 2007. "How Does the Composition of Public Spending Matter?," Oxford Development Studies, Taylor & Francis Journals, vol. 35(1), pages 47-82.
  10. 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.

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