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A hybrid approach to efficiency measurement with empirical illustrations from education and health

  • Wagstaff, Adam
  • Wang, L. Choon

Inefficiency is commonplace, yet exercises aimed at improving provider performance efforts to date to measure inefficiency and use it in benchmarking exercises have not been altogether satisfactory. This paper proposes a new approach that blends the themes of Data Envelopment Analysis and the Stochastic Frontier Approach to measure overall efficiency. The hybrid approach nonparametrically estimates inefficiency by comparing actual performance with comparable real-life"best practice"on the frontier and could be useful in exercises aimed at improving provider performance. Four applications in the education and health sectors are used to illustrate the features and strengths of this hybrid approach.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 5751.

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Date of creation: 01 Aug 2011
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Handle: RePEc:wbk:wbrwps:5751
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  1. Fuchs, Thomas & Woessmann, Ludger, 2004. "What Accounts for International Differences in Student Performance? A Re-Examination Using PISA Data," IZA Discussion Papers 1287, Institute for the Study of Labor (IZA).
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  7. Léopold Simar & Paul Wilson, 2000. "Statistical Inference in Nonparametric Frontier Models: The State of the Art," Journal of Productivity Analysis, Springer, vol. 13(1), pages 49-78, January.
  8. Bruce Hollingsworth & Andrew Street, 2006. "The market for efficiency analysis of health care organisations," Health Economics, John Wiley & Sons, Ltd., vol. 15(10), pages 1055-1059.
  9. Weaver, Marcia & Deolalikar, Anil, 2004. "Economies of scale and scope in Vietnamese hospitals," Social Science & Medicine, Elsevier, vol. 59(1), pages 199-208, July.
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  11. Deller, Steven C. & Rudnicki, Edward, 1993. "Production efficiency in elementary education: The case of Maine public schools," Economics of Education Review, Elsevier, vol. 12(1), pages 45-57, March.
  12. Andrew Worthington, 2001. "An Empirical Survey of Frontier Efficiency Measurement Techniques in Education," Education Economics, Taylor & Francis Journals, vol. 9(3), pages 245-268.
  13. Schmidt, Peter & Sickles, Robin C, 1984. "Production Frontiers and Panel Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(4), pages 367-74, October.
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