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The relevance of commuting zones for regional spending efficiency

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  • António Afonso
  • Ana Venâncio

Abstract

We use Data Envelopment Analysis (DEA) efficiency scores to show that clustering municipalities into encompassing regional clusters improves spending efficiency of single stand- alone municipalities. We propose a new geographic aggregation based on municipalities-to- municipalities commuting flows, defined using hierarchical cluster analysis. Our example for Portugal shows that from an output oriented perspective, between 85 and 95 percent of municipalities would increase their efficiency scores, while from an input oriented perspective, between 81 and 97 percent of municipalities would also be better off in terms of efficiency. Our strategy and results are naturally quite relevant in a context of public spending control.

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File URL: http://pascal.iseg.utl.pt/~depeco/wp/wp172013.pdf
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Bibliographic Info

Paper provided by ISEG - School of Economics and Management, Department of Economics, University of Lisbon in its series Working Papers Department of Economics with number 2013/17.

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Date of creation: Sep 2013
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Handle: RePEc:ise:isegwp:wp172013

Contact details of provider:
Postal: Department of Economics, ISEG - School of Economics and Management, University of Lisbon, Rua do Quelhas 6, 1200-781 LISBON, PORTUGAL
Web page: https://aquila1.iseg.ulisboa.pt/aquila/departamentos/EC

Related research

Keywords: public spending efficiency; local government; data envelopment analyis (DEA); commuting.;

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  1. Afonso, António & Fernandes, Sónia, 2008. "Assessing and explaining the relative efficiency of local government," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(5), pages 1946-1979, October.
  2. António Afonso & Miguel St. Aubyn, 2005. "Non-parametric approaches to education and health efficiency in OECD countries," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 227-246, November.
  3. Afonso, António & Schuknecht, Ludger & Tanzi, Vito, 2003. "Public sector efficiency: an international comparison," Working Paper Series 0242, European Central Bank.
  4. António Afonso & Miguel St. Aubyn, 2005. "Cross-country Efficiency of Secondary Education Provision: a Semi-parametric Analysis with Nondiscretionary Inputs," Working Papers Department of Economics 2005/05, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
  5. De Borger, Bruno & Kerstens, Kristiaan, 1996. "Cost efficiency of Belgian local governments: A comparative analysis of FDH, DEA, and econometric approaches," Regional Science and Urban Economics, Elsevier, vol. 26(2), pages 145-170, April.
  6. Angel Prieto & José ZofIo, 2001. "Evaluating Effectiveness in Public Provision of Infrastructure and Equipment: The Case of Spanish Municipalities," Journal of Productivity Analysis, Springer, vol. 15(1), pages 41-58, January.
  7. De Borger, B, et al, 1994. " Explaining Differences in Productive Efficiency: An Application to Belgian Municipalities," Public Choice, Springer, vol. 80(3-4), pages 339-58, September.
  8. Afonso, António & Schuknecht, Ludger & Tanzi, Vito, 2006. "Public sector efficiency: evidence for new EU member states and emerging markets," Working Paper Series 0581, European Central Bank.
  9. Miguel St. Aubyn & �lvaro Pina & Filomena Garcia & Joana Pais, 2009. "Study on the efficiency and effectiveness of public spending on tertiary education," European Economy - Economic Papers 390, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
  10. Antonio Afonso & Sonia Fernandes, 2006. "Measuring local government spending efficiency: Evidence for the Lisbon region," Regional Studies, Taylor & Francis Journals, vol. 40(1), pages 39-53.
  11. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
  12. Topel, Robert H, 1986. "Local Labor Markets," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages S111-43, June.
  13. Antonio Afonso & Miguel St. Aubyn, 2011. "Assessing health efficiency across countries with a two-step and bootstrap analysis," Applied Economics Letters, Taylor & Francis Journals, vol. 18(15), pages 1427-1430.
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