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Radial measures of public services deficit for regional allocation of public funds

The goal of this paper is to present an optimal resource allocation model for the regional allocation of public service inputs. The proposed solution leads to maximise the relative public service availability in regions located below the best availability frontier, subject to exogenous budget restrictions and equality of access for equal need criteria (equity-based notion of regional needs). The construction of non-parametric deficit indicators is proposed for public service availability by a novel application of Data Envelopment Analysis (DEA) models, whose results offer advantages for the evaluation and improvement of decentralised public resource allocation systems. The method introduced in this paper has relevance as a resource allocation guide for the majority of services centrally funded by the public sector in a given country, such as health care, basic and higher education, citizen safety, justice, transportation, environmental protection, leisure, culture, housing and city planning, etc.

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Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Working Papers, Research Center on Health and Economics with number 439.

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Date of creation: Dec 1999
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Handle: RePEc:upf:upfses:439
Contact details of provider: Web page: http://www.econ.upf.edu/

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  1. Lovell, C.A.K., 1993. "Linear Programming Approaches to the Measurement and Analysis of Productive Efficiency," Papers 393e, Georgia - College of Business Administration, Department of Economics.
  2. Gijbels, Irène & Mammen, Enno & Park, Byeong U. & Simar, Léopold, 1998. "On estimation of monotone and concave frontier functions," SFB 373 Discussion Papers 1998,9, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
  3. del Carmen Marco Gil, M., 1995. "Efficient solutions for bargaining problems with claims," Mathematical Social Sciences, Elsevier, vol. 30(1), pages 57-69, August.
  4. Javier Ruiz-Castillo, 1995. "Income distribution and social welfare: a review essay," Investigaciones Economicas, Fundación SEPI, vol. 19(1), pages 3-34, January.
  5. Antonio Villar Notario & José María Tomás, 1992. "La medición del bienestar mediante indicadores de "renta real": caracterización de un índice de bienestar tipo Theil," Working Papers. Serie EC 1992-07, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  6. Herrero, Carmen & Marco, Maria Carmen, 1993. "Rational equal-loss solutions for bargaining problems," Mathematical Social Sciences, Elsevier, vol. 26(3), pages 273-286, November.
  7. Bossert, Walter, 1993. "An alternative solution to bargaining problems with claims," Mathematical Social Sciences, Elsevier, vol. 25(3), pages 205-220, May.
  8. Roy Carr-Hill & Geoffrey Hardman & Stephen Martin & Stuart Peacock & Trevor Sheldon & Peter Smith, 1994. "A formula for distributing NHS revenues based on small area use of hospital beds," Working Papers 022cheop, Centre for Health Economics, University of York.
  9. Jaume Puig Junoy & Angel Lopez Nicoĺs, 1995. "Assessing health care infrastructure at the regional level: a statistical approach," Applied Economics Letters, Taylor & Francis Journals, vol. 2(12), pages 463-466.
  10. Rajiv D. Banker, 1993. "Maximum Likelihood, Consistency and Data Envelopment Analysis: A Statistical Foundation," Management Science, INFORMS, vol. 39(10), pages 1265-1273, October.
  11. 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.
  12. Dutta, B. & Esteban, J., 1988. "Social Welfare And Equality," UFAE and IAE Working Papers 89.88, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  13. A Bosch-Dom�nech & C Escribano, 1988. "Regional allocation of public funds: an evaluation index," Environment and Planning A, Pion Ltd, London, vol. 20(10), pages 1323-1333, October.
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