IDEAS home Printed from https://ideas.repec.org/p/hhs/osloec/2012_009.html
   My bibliography  Save this paper

Measuring Efficiency in the Public Sector

Author

Listed:
  • Førsund, Finn R.

    (Dept. of Economics, University of Oslo)

Abstract

The distinction between the concepts outputs and outcomes can be made operational based on the consideration of the degree of control a public service producer has over its production activity. Resources are transformed into service outputs under the control of the organisation in question, while outcomes represent some higher social goals than outputs and are determined by the outputs and other exogenous variables, but these will usually be outside the control of the organisation. The link to the calculation of savings potentials and efficiency measurement is provided based on introducing the concept of a benchmark frontier technology for the type of production in question. A new measure of overall preference efficiency is introduced and its decomposition into output-oriented technical efficiency and mix efficiency is shown. The rather monumental task of providing the necessary information for calculating mix efficiency is highlighted.

Suggested Citation

  • Førsund, Finn R., 2012. "Measuring Efficiency in the Public Sector," Memorandum 09/2012, Oslo University, Department of Economics.
  • Handle: RePEc:hhs:osloec:2012_009
    as

    Download full text from publisher

    File URL: https://www.sv.uio.no/econ/english/research/unpublished-works/working-papers/pdf-files/2012/memo-09-2012.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Haskel, Jonathan & Sanchis, Amparo, 1995. "Privatisation and X-Inefficiency: A Bargaining Approach," Journal of Industrial Economics, Wiley Blackwell, vol. 43(3), pages 301-321, September.
    2. 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.
    3. Hanoch, Giora, 1970. "Homotheticity in joint production," Journal of Economic Theory, Elsevier, vol. 2(4), pages 423-426, December.
    4. Peter Bogetoft & Jens Hougaard, 2003. "Rational Inefficiencies," Journal of Productivity Analysis, Springer, vol. 20(3), pages 243-271, November.
    5. W. Diewert, 2011. "Measuring productivity in the public sector: some conceptual problems," Journal of Productivity Analysis, Springer, vol. 36(2), pages 177-191, October.
    6. 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.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. F R Førsund & L Hjalmarsson, 2004. "Calculating scale elasticity in DEA models," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 55(10), pages 1023-1038, October.
    2. Førsund, Finn R., 2017. "Measuring effectiveness of production in the public sector," Omega, Elsevier, vol. 73(C), pages 93-103.
    3. repec:lan:wpaper:4471 is not listed on IDEAS
    4. Khanal, Aditya & Koirala, Krishna & Regmi, Madhav, 2016. "Do Financial Constraints Affect Production Efficiency in Drought Prone Areas? A Case from Indonesian Rice Growers," 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas 230087, Southern Agricultural Economics Association.
    5. Noel Uri, 2003. "The Effect of Incentive Regulation in Telecommunications in the United States," Quality & Quantity: International Journal of Methodology, Springer, vol. 37(2), pages 169-191, May.
    6. Michaelides, Panayotis G. & Vouldis, Angelos T. & Tsionas, Efthymios G., 2010. "Globally flexible functional forms: The neural distance function," European Journal of Operational Research, Elsevier, vol. 206(2), pages 456-469, October.
    7. Kuosmanen, Timo & Johnson, Andrew, 2017. "Modeling joint production of multiple outputs in StoNED: Directional distance function approach," European Journal of Operational Research, Elsevier, vol. 262(2), pages 792-801.
    8. Tovar, Beatriz & Wall, Alan, 2015. "Can ports increase traffic while reducing inputs? Technical efficiency of Spanish Port Authorities using a directional distance function approach," Transportation Research Part A: Policy and Practice, Elsevier, vol. 71(C), pages 128-140.
    9. Vaneet Bhatia & Sankarshan Basu & Subrata Kumar Mitra & Pradyumna Dash, 2018. "A review of bank efficiency and productivity," OPSEARCH, Springer;Operational Research Society of India, vol. 55(3), pages 557-600, November.
    10. Subhash C. Ray & Lei Chen, 2015. "Data Envelopment Analysis for Performance Evaluation: A Child’s Guide," Springer Books, in: Subhash C. Ray & Subal C. Kumbhakar & Pami Dua (ed.), Benchmarking for Performance Evaluation, edition 127, chapter 0, pages 75-116, Springer.
    11. Fabio Pammolli & Francesco Porcelli & Francesco Vidoli & Guido Borà, 2014. "La spesa sanitaria delle Regioni in Italia - Saniregio 3," Working Papers CERM 02-2014, Competitività, Regole, Mercati (CERM).
    12. Fabio Pammolli & Francesco Porcelli & Francesco Vidoli & Monica Auteri & Guido Borà, 2017. "La spesa sanitaria delle Regioni in Italia - Saniregio2017," Working Papers CERM 01-2017, Competitività, Regole, Mercati (CERM).
    13. Ruwan Jayasuriya & Quentin Wodon, 2007. "Efficiency in Improving Health and Education Outcomes: Provincial and State-Level Estimates for Argentina and Mexico," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 22(1), pages 57-97.
    14. J. Cummins & Hongmin Zi, 1998. "Comparison of Frontier Efficiency Methods: An Application to the U.S. Life Insurance Industry," Journal of Productivity Analysis, Springer, vol. 10(2), pages 131-152, October.
    15. Musshoff, Oliver & Hirschauer, Norbert & Herink, Michael, 2009. "Bei welchen Problemstrukturen sind Data-Envelopment-Analysen sinnvoll? Eine kritische Würdigung," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 58(02), pages 1-11, February.
    16. Ewelina Nojszewska, 2011. "Economic effectiveness as an analytical tool for health care (Efektywnosc ekonomiczna jako narzedzie analityczne dla ochrony zdrowia)," Problemy Zarzadzania, University of Warsaw, Faculty of Management, vol. 9(33), pages 11-26.
    17. O’Loughlin, Caitlin & Simar, Léopold & Wilson, Paul, 2021. "Methodologies for assessing government efficiency," LIDAM Discussion Papers ISBA 2021002, Université catholique de Louvain, Institute of Statistics, Biostatistics and Actuarial Sciences (ISBA).
    18. Meryem Duygun Fethi & Mohamed Shaban & Thomas Weyman-Jones, 2009. "Liberalisation, privatisation and the productivity of Egyptian banks: a non-parametric approach," The Service Industries Journal, Taylor & Francis Journals, vol. 31(7), pages 1143-1163, September.
    19. Alessandra Cepparulo & Gilles Mourre, 2020. "How and How Much? The Growth-Friendliness of Public Spending through the Lens," European Economy - Discussion Papers 2015 - 132, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    20. Martins-Filho, Carlos & Ziegelmann, Flávio Augusto & Torrent, Hudson da Silva, 2013. "Local Exponential Frontier Estimation," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 33(2), November.
    21. Gil, Guilherme Dôco Roberti & Costa, Marcelo Azevedo & Lopes, Ana Lúcia Miranda & Mayrink, Vinícius Diniz, 2017. "Spatial statistical methods applied to the 2015 Brazilian energy distribution benchmarking model: Accounting for unobserved determinants of inefficiencies," Energy Economics, Elsevier, vol. 64(C), pages 373-383.

    More about this item

    Keywords

    Outputs; outcomes; Farrell efficiency measures; savings potentials; output mix efficiency;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • H40 - Public Economics - - Publicly Provided Goods - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:osloec:2012_009. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/souiono.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mari Strønstad Øverås (email available below). General contact details of provider: https://edirc.repec.org/data/souiono.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.