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Efficiency and Productivity in the Operational Units of the Armed Forces

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  • Torbjørn, Hanson

    ()
    (Dept. of Economics, University of Oslo)

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    Abstract

    Most nations spend a considerable part of their gross domestic product (GDP) on defense. However, no previous study has addressed the productivity and efficiency of the core area of the armed forces, operational units, using Data Envelopment Analysis (DEA). Introducing a model for the production process of an operational unit, productivity and efficiency are estimated by DEA for units of one branch of the Norwegian armed forces. Small samples are a characteristic of DEA studies in the military, and the public sector in general, resulting in a lion’s share of the units being estimated as fully efficient. We find that, by using the bootstrap technique to estimate confidence intervals, we can point at the uncertainty of the estimates and reduce the number of candidates for best practice.

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    File URL: https://www.sv.uio.no/econ/english/research/unpublished-works/working-papers/pdf-files/2012/Memo-07-2012.pdf
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    Bibliographic Info

    Paper provided by Oslo University, Department of Economics in its series Memorandum with number 07/2012.

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    Length: 31 pages
    Date of creation: 28 Feb 2012
    Date of revision:
    Handle: RePEc:hhs:osloec:2012_007

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    Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
    Phone: 22 85 51 27
    Fax: 22 85 50 35
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    Web page: http://www.oekonomi.uio.no/indexe.html
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    Keywords: Military; Productivity; Efficiency; DEA; Bootstrap;

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    1. Førsund, Finn R. & Edvardsen, Dag Fjeld & Kittelsen, Sverre A. C, & Lindseth, Frode, 2009. "Productivity of Tax Offices in Norway," Memorandum 14/2009, Oslo University, Department of Economics.
    2. Léopold Simar & Paul W. Wilson, 1998. "Sensitivity Analysis of Efficiency Scores: How to Bootstrap in Nonparametric Frontier Models," Management Science, INFORMS, vol. 44(1), pages 49-61, January.
    3. SIMAR, Léopold & WILSON, Paul, 1996. "Estimating and bootstrapping malmquist indices," CORE Discussion Papers 1996060, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    4. Kittelsen,S.A.C., 1999. "Monte Carlo simulations of DEA efficiency measures and hypothesis tests," Memorandum 09/1999, Oslo University, Department of Economics.
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