IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/51586.html
   My bibliography  Save this paper

Smart Cities and a Stochastic Frontier Analysis: A Comparison among European Cities

Author

Listed:
  • Mundula, Luigi
  • Auci, Sabrina

Abstract

The level of interest in smart cities is growing, and the recent literature on this topic (Holland, 2008; Caragliu et al., 2009, Nijkamp et al., 2011 and Lombardi et al., 2012) identifies a number of factors that characterise a city as smart, such as economic development, environment, human capital, culture and leisure, and e-governance. Thus, the smartness concept is strictly linked to urban efficiency in a multifaceted way. A seminal research for European policy conducted by Giffinger et al. (2007) defines a smart city on the basis of several intangible indicators, such as a smart economy, smart mobility, smart environment, smart people, smart living, and smart governance. These authors’ methodology results in a ranking of 70 European cities in terms of their smartness. Our aim is to verify the robustness of these smartness indicators in explaining the efficiency of the same sample of European cities. Using the concept of output maximising, we built a stochastic frontier function in terms of urban productivity and/or urban efficiency by assessing the economic distance that separates cities from being smart. Moreover, this approach, which distinguishes between inputs and efficiency, allows us to incorporate the smartness indicators into the systematic component within the error term. As a result, our conclusions identify a different ranking of European cities with respect to Giffinger et al. (2007)’s analysis, thereby highlighting the need for a better and more robust definition of these indicators.

Suggested Citation

  • Mundula, Luigi & Auci, Sabrina, 2013. "Smart Cities and a Stochastic Frontier Analysis: A Comparison among European Cities," MPRA Paper 51586, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:51586
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/51586/1/MPRA_paper_51586.pdf
    File Function: original version
    Download Restriction: no

    References listed on IDEAS

    as
    1. Etzkowitz, Henry & Leydesdorff, Loet, 2000. "The dynamics of innovation: from National Systems and "Mode 2" to a Triple Helix of university-industry-government relations," Research Policy, Elsevier, vol. 29(2), pages 109-123, February.
    2. Kalirajan, K P & Shand, R T, 1999. " Frontier Production Functions and Technical Efficiency Measures," Journal of Economic Surveys, Wiley Blackwell, vol. 13(2), pages 149-172, April.
    3. Berry, Christopher R. & Glaeser, Edward L., 2005. "Divergence of Human Capital Levels across Cities," Working Paper Series rwp05-057, Harvard University, John F. Kennedy School of Government.
    4. Jesse M. Shapiro, 2006. "Smart Cities: Quality of Life, Productivity, and the Growth Effects of Human Capital," The Review of Economics and Statistics, MIT Press, vol. 88(2), pages 324-335, May.
    5. Evangelia Desli & Subhash Ray & Subal Kumbhakar, 2003. "A dynamic stochastic frontier production model with time-varying efficiency," Applied Economics Letters, Taylor & Francis Journals, vol. 10(10), pages 623-626.
    6. Lars P. Feld & Gebhard Kirchgässner & Christoph A. Schaltegger, 2004. "Fiscal Federalism and Economic Performance: Evidence from Swiss Cantons," Marburg Working Papers on Economics 200420, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    7. Kumbhakar, Subal C., 1990. "Production frontiers, panel data, and time-varying technical inefficiency," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 201-211.
    8. Meeusen, Wim & van den Broeck, Julien, 1977. "Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 435-444, June.
    9. Forsund, Finn R. & Lovell, C. A. Knox & Schmidt, Peter, 1980. "A survey of frontier production functions and of their relationship to efficiency measurement," Journal of Econometrics, Elsevier, vol. 13(1), pages 5-25, May.
    10. Lombardi, P. & Giordano, S. & Caragliu, A. & Del Bo, C., 2011. "An advanced triple-helix network model for smart cities performance," Serie Research Memoranda 0045, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    11. Pitt, Mark M. & Lee, Lung-Fei, 1981. "The measurement and sources of technical inefficiency in the Indonesian weaving industry," Journal of Development Economics, Elsevier, vol. 9(1), pages 43-64, August.
    12. Schmidt, Peter & Sickles, Robin C, 1984. "Production Frontiers and Panel Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(4), pages 367-374, October.
    13. George E. Battese & Greg S. Corra, 1977. "Estimation Of A Production Frontier Model: With Application To The Pastoral Zone Of Eastern Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 21(3), pages 169-179, December.
    14. Robert G. Hollands, 2008. "Will the real smart city please stand up?," City, Taylor & Francis Journals, vol. 12(3), pages 303-320, December.
    15. Caragliu, A. & Del Bo, C. & Nijkamp, P., 2009. "Smart cities in Europe," Serie Research Memoranda 0048, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    16. Todd M. Gabe, 2006. "Growth of Creative Occupations in U.S. Metropolitan Areas: A Shift-Share Analysis," Growth and Change, Wiley Blackwell, vol. 37(3), pages 396-415.
    17. Edward L. Glaeser & Charles Redlick, 2008. "Social Capital and Urban Growth," NBER Working Papers 14374, National Bureau of Economic Research, Inc.
    18. Ann Markusen, 2006. "Urban development and the politics of a creative class: evidence from a study of artists," Environment and Planning A, Pion Ltd, London, vol. 38(10), pages 1921-1940, October.
    19. Christopher R. Berry & Edward L. Glaeser, 2005. "The Divergence of Human Capital Levels across Cities," Harvard Institute of Economic Research Working Papers 2091, Harvard - Institute of Economic Research.
    20. Leonardo Meeus & Erik Delarue & Isabel Azevedo & Jean-Michel Glachant & Vitor Leal & Eduardo de Oliveira Fernandes, 2010. "Smart Cities Initiative: how to foster a quick transition towards local sustainable energy systems," RSCAS Working Papers 2010/70, European University Institute.
    21. Cornwell, Christopher & Schmidt, Peter & Sickles, Robin C., 1990. "Production frontiers with cross-sectional and time-series variation in efficiency levels," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 185-200.
    22. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-332.
    23. Christopher R. Berry & Edward L. Glaeser, 2005. "The Divergence of Human Capital Levels Across Cities," NBER Working Papers 11617, National Bureau of Economic Research, Inc.
    24. 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)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. De Santis, Roberta & Fasano, Alessandra & Mignolli, Nadia & Villa, Anna, 2014. "Smart city: fact and fiction," MPRA Paper 54536, University Library of Munich, Germany.
    2. de santis, roberta & Fasano, Alessandra & Mignolli, Nadia & Villa, Anna, 2013. "Il quadro concettuale e le esperienze di misurazione delle Smart Cities
      [Smart cities: theoretical framework and measurement experiences]
      ," MPRA Paper 50207, University Library of Munich, Germany.
    3. Roberta De Santis & Alessandra Fasano & Nadia Mignolli & Anna Villa, 2015. "A primer on city "smartness" measurement," RIVISTA DI ECONOMIA E STATISTICA DEL TERRITORIO, FrancoAngeli Editore, vol. 2015(2), pages 34-51.

    More about this item

    Keywords

    smart cities; stochastic frontier; technical inefficiency;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

    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:pra:mprapa:51586. 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: (Joachim Winter). General contact details of provider: http://edirc.repec.org/data/vfmunde.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 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.

    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.