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Efficiency potential and determinants of efficiency: An analysis of the care of elderly sector in Norway

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  • Lars-Erik Borge

    ()
    (Department of Economics, Norwegian University of Science and Technology)

  • Marianne Haraldsvik

    ()
    (Department of Economics, Norwegian University of Science and Technology)

Abstract

The paper provides an analysis of efficiency in the care for the elderly sector in Norway. In a first step we perform DEA analysis to calculate the degree of efficiency in each municipality and the national level efficiency potential. The analysis reveals substantial variation in efficiency across municipalities, and the national level efficiency potential is calculated to 10%. Tobit regressions and recently developed bootstrap methods are applied in a second stage to explain the variation in efficiency. The second stage analyses indicate that high fiscal capacity, a low degree of user charge financing, and a fragmented local council are associated with low efficiency.

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File URL: http://www.svt.ntnu.no/iso/WP/2009/4_lebmh_wp.pdf
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Bibliographic Info

Paper provided by Department of Economics, Norwegian University of Science and Technology in its series Working Paper Series with number 10109.

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Length: 26 pages
Date of creation: 25 Mar 2009
Date of revision:
Handle: RePEc:nst:samfok:10109

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Web page: http://www.svt.ntnu.no/iso/WP/wp.htm
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  1. Kooreman, Peter, 1994. "Nursing home care in The Netherlands: a nonparametric efficiency analysis," Journal of Health Economics, Elsevier, vol. 13(3), pages 301-316, October.
  2. Borge, Lars-Erik & Rattso, Jorn, 1995. "Demographic shift, relative costs and the allocation of local public consumption in Norway," Regional Science and Urban Economics, Elsevier, vol. 25(6), pages 705-726, December.
  3. Nyman, John A & Bricker, Dennis L, 1989. "Profit Incentives and Technical Efficiency in the Production of Nursing Home Care," The Review of Economics and Statistics, MIT Press, vol. 71(4), pages 586-94, November.
  4. Lars-Erik Borge & Jørn Rattsø, 2003. "The Relationships Between Costs and User Charges: The Case of a Norwegian Utility Service," CESifo Working Paper Series 1033, CESifo Group Munich.
  5. Lars-Erik Borge & Torberg Falch & Per Tovmo, 2008. "Public sector efficiency: the roles of political and budgetary institutions, fiscal capacity, and democratic participation," Public Choice, Springer, vol. 136(3), pages 475-495, September.
  6. Laurence Assous, 2001. "Long-term Health and Social Care for the Elderly: An International Perspective*," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan, vol. 26(4), pages 667-683, October.
  7. 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.
  8. Simar, Leopold & Wilson, Paul W., 2007. "Estimation and inference in two-stage, semi-parametric models of production processes," Journal of Econometrics, Elsevier, vol. 136(1), pages 31-64, January.
  9. Lars-Erik Borge & Linn Renée Naper, 2006. "Efficiency Potential and Efficiency Variation in Norwegian Lower Secondary Schools," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 62(2), pages 221-249, June.
  10. Massimo Filippini, 1999. "Economies Of Scale In The Swiss Nursing Home Industry," SOI - Working Papers 9901, Socioeconomic Institute - University of Zurich.
  11. 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.
  12. Vitaliano, Donald F. & Toren, Mark, 1994. "Cost and efficiency in nursing homes: a stochastic frontier approach," Journal of Health Economics, Elsevier, vol. 13(3), pages 281-300, October.
  13. Laure Latruffe & Sophia Davidova & Kelvin Balcombe, 2008. "Application of a double bootstrap to investigation of determinants of technical efficiency of farms in Central Europe," Journal of Productivity Analysis, Springer, vol. 29(2), pages 183-191, April.
  14. Juha Laine & Miika Linna & Unto Häkkinen & Anja Noro, 2005. "Measuring the productive efficiency and clinical quality of institutional long-term care for the elderly," Health Economics, John Wiley & Sons, Ltd., vol. 14(3), pages 245-256.
  15. Jorid Kalseth & Jørn Rattsø, 1998. "Political Control of Administrative Spending: The Case of Local Governments in Norway," Economics and Politics, Wiley Blackwell, vol. 10(1), pages 63-83, 03.
  16. Perelman, Sergio & Santín, Daniel, 2009. "How to generate regularly behaved production data? A Monte Carlo experimentation on DEA scale efficiency measurement," European Journal of Operational Research, Elsevier, vol. 199(1), pages 303-310, November.
  17. R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
  18. Niskanen, William A, 1975. "Bureaucrats and Politicians," Journal of Law and Economics, University of Chicago Press, vol. 18(3), pages 617-43, December.
  19. Mei Xue & Patrick T. Harker, 1999. "Overcoming the Inherent Dependency of DEA Efficiency Scores: A Bootstrap Approach," Center for Financial Institutions Working Papers 99-17, Wharton School Center for Financial Institutions, University of Pennsylvania.
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Cited by:
  1. Massimo Finocchiaro Castro & Calogero Guccio & Ilde Rizzo, 2011. "Public intervention on heritage conservation and determinants of heritage authorities’ performance: a semi-parametric analysis," International Tax and Public Finance, Springer, vol. 18(1), pages 1-16, February.
  2. Peter Bönisch & Peter Haug & A. Illy & L. Schreier, 2011. "Municipality Size and Efficiency of Local Public Services: Does Size Matter?," IWH Discussion Papers 18, Halle Institute for Economic Research.

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