Cost Efficiency of Finnish Municipalities in Basic Service Provision 1994-2002
Cost efficiency of basic welfare service provision in 353 Finnish municipalities in 1994-2002 is investigated. In a basically two tier public sector (central government and municipalities) the municipal sector has a central role in the Finnish economy as a provider of welfare services. Data Envelopment Analysis (DEA), a non-parametric linear programming method is employed, calculating a best practise total cost frontier for the decision making units, and comparing the various DMUs with this frontier. The outputs consist of up to ten volume indicators of services in health, social and educational sector. As the combined input, total real production costs of these services is used. According to the results efficiency differences were considerable between the municipalities, and a small group of a peripheral municipalities scored clearly below the others. Also annual changes in cost efficiency were estimated. As a second stage, differences in the DEA cost efficiency scores were explained with statistical models. Here the explanatory variables included structural and demographic indicators of municipalities, their location and measures of political power at local level. According to the results several of these variables had an expected effect on cost efficiency.
|Date of creation:||Aug 2005|
|Date of revision:|
|Contact details of provider:|| Postal: Welthandelsplatz 1, 1020 Vienna, Austria|
Web page: http://www.ersa.org
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Balaguer-Coll, Maria Teresa & Prior, Diego & Tortosa-Ausina, Emili, 2007.
"On the determinants of local government performance: A two-stage nonparametric approach,"
European Economic Review,
Elsevier, vol. 51(2), pages 425-451, February.
- Emili Tortosa Ausina & Diego Prior & María Teresa Balaguer-Coll, 2004. "On The Determinants Of Local Government Performance: A Two-Stage Nonparametric Approach," Working Papers. Serie EC 2004-04, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- Baumol, William J, 1972. "Macroeconomics of Unbalanced Growth: Reply," American Economic Review, American Economic Association, vol. 62(1), pages 150, March.
- Loikkanen, Heikki A. & Susiluoto, Ilkka, 2002. "An evaluation of economic efficiency of finnish regions by DEA and Tobit models," ERSA conference papers ersa02p237, European Regional Science Association.
- Kirjavainen, Tanja & Loikkanent, Heikki A., 1998.
"Efficiency differences of finnish senior secondary schools: An application of DEA and Tobit analysis,"
Economics of Education Review,
Elsevier, vol. 17(4), pages 377-394, October.
- Kirjavainen, Tanja & Loikkanen, Heikki, 1996. "Efficiency Differences of Finnish Senior Secondary Schools: An Application of DEA and Tobit-Analysis," Discussion Papers 570, The Research Institute of the Finnish Economy.
- Tanja Kirjavainen & Heikki A. Loikkanen, 1995. "School Resources and Student Achievement: Evidence from Finnish Senior Secondary Schools," Discussion Papers 91, Government Institute for Economic Research Finland (VATT).
- Seiford, Lawrence M. & Thrall, Robert M., 1990. "Recent developments in DEA : The mathematical programming approach to frontier analysis," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 7-38.
- 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.
- De Borger, Bruno & Kerstens, Kristiaan, 1996.
"Cost efficiency of Belgian local governments: A comparative analysis of FDH, DEA, and econometric approaches,"
Regional Science and Urban Economics,
Elsevier, vol. 26(2), pages 145-170, April.
- DE BORGER, Bruno & KERSTENS, Kristiaan, 1994. "Cost efficiency of Belgian local governments: A comparative analysis of FDH, DEA and econometric approaches," SESO Working Papers 1994002, University of Antwerp, Faculty of Applied Economics.
- 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.
- DE BORGER, Bruno & KERSTENS, K. & MOESEN, Wim & VANNESTE, Jacques, 1992.
"Explaining differences in productive efficiency: An application to Belgian municipalities,"
SESO Working Papers
1992003, University of Antwerp, Faculty of Applied Economics.
- De Borger, B, et al, 1994. " Explaining Differences in Productive Efficiency: An Application to Belgian Municipalities," Public Choice, Springer, vol. 80(3-4), pages 339-58, September.
- António Afonso & Sónia Fernandes, 2003. "Efficiency of Local Government Spending: Evidence for the Lisbon Region," Working Papers Department of Economics 2003/09, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
- Maija-Liisa Järviö & Kalevi Luoma, 2000. "Productivity Changes in Finnish Health Centres: A Malmquist Index Approach," Discussion Papers 218, Government Institute for Economic Research Finland (VATT).
When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa05p37. 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: (Gunther Maier)
If references are entirely missing, you can add them using this form.