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Efficiency of Queensland Public Hospitals via Spatial Panel Stochastic Frontier Models

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  • Bao Hoang Nguyen

    (Centre for the Economics and Business of Health, The University of Queensland, Brisbane, Qld 4072, Australia)

  • Zhichao Wang

    (School of Economics and Centre for Efficiency and Productivity Analysis (CEPA) at The University of Queensland, Australia)

  • Valentin Zelenyuk

    (School of Economics and Centre for Efficiency and Productivity Analysis (CEPA) at The University of Queensland, Australia)

Abstract

We adapt a range of mainstream spatial econometric models to the four-component error term panel stochastic frontier framework to estimate the inefficiency of public hospitals in Queensland, Australia, and to investigate different channels of spatial effects in hospital performance. Our results demonstrate a statistically significant presence of the spatial dependence from the autoregressive dependent variable and the autocorrelated error term. Additionally, we observe a positive spillover effect of input factors, as well as some impacts from accounting for the spatial dependence on the inefficiency estimation. Specifically, the resulting inefficiency estimates from the spatial models turned out to be higher than those from the non-spatial model, yet the magnitude of difference is relatively modest, confirming the approximate validity of the non-spatial stochastic frontier approach for this data set.

Suggested Citation

  • Bao Hoang Nguyen & Zhichao Wang & Valentin Zelenyuk, 2023. "Efficiency of Queensland Public Hospitals via Spatial Panel Stochastic Frontier Models," CEPA Working Papers Series WP102023, School of Economics, University of Queensland, Australia.
    • Handle: RePEc:qld:uqcepa:192
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    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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