Line Item Budgeting and Production Efficiency

Journal of Theoretical Accounting Research, Volume 7, Issue 1, Fall 2011,pp. 108-126

31 Pages Posted: 15 Nov 2008 Last revised: 20 Feb 2018

See all articles by Rajiv D. Banker

Rajiv D. Banker

Temple University - Department of Accounting

Hsihui Chang

Drexel University

Ehsan H. Feroz

University of Washington, Milgard School of Business-Accounting ; University of Illinois at Urbana-Champaign; Government of the United States of America - US GAO Advisory Council; University of Minnesota, Labovitz School of Business-Department of Accounting; University of Minnesota, Carlson School of Management-Department of Accounting; American Accounting Association

Date Written: November 13, 2008

Abstract

Line item budgeting is a widely used managerial control device in governmental and nonprofit organizations. In this study, we explicitly model the relationship between input quantities and their prices with particular focus on the line item budgeting assumption of input separability, i.e., optimal quantity for each input is determined separately and independently of other inputs. Our empirical results support input separability and reject input substitutability.

Keywords: Line item budgeting, production efficiency, governments, nonprofits, school districts, Political Economy

JEL Classification: M40, M46, M48, C44, C67, D61, G34, I22, L30,L31, L51, P16

Suggested Citation

Banker, Rajiv D. and Chang, Hsihui and Feroz, Ehsan H., Line Item Budgeting and Production Efficiency (November 13, 2008). Journal of Theoretical Accounting Research, Volume 7, Issue 1, Fall 2011,pp. 108-126. Available at SSRN: https://ssrn.com/abstract=1300724 or http://dx.doi.org/10.2139/ssrn.1300724

Rajiv D. Banker

Temple University - Department of Accounting ( email )

Philadelphia, PA 19122
United States

Hsihui Chang

Drexel University ( email )

3141 Chestnut St
Philadelphia, PA 19104
United States

Ehsan H. Feroz (Contact Author)

University of Washington, Milgard School of Business-Accounting ( email )

1900 Commerce Street, Campus Box 358420
Tacoma, WA 98402-3100
United States
(253) 692 4728 (Phone)
253 692 4523 (Fax)

HOME PAGE: http://www.tacoma.washington.edu/business

University of Illinois at Urbana-Champaign ( email )

515 East Gregory Drive# 2307
Champaign, IL 61820
United States

Government of the United States of America - US GAO Advisory Council ( email )

441 G Street NW
Washington, DC 20548-0001
United States

University of Minnesota, Labovitz School of Business-Department of Accounting ( email )

10 University Drive
Labovitz School of Business
Duluth, MN 55812
United States
218-726-6988 (Phone)
218-726-8510 (Fax)

University of Minnesota, Carlson School of Management-Department of Accounting ( email )

420 Delaware St. SE
Minneapolis, MN 55455
United States

American Accounting Association ( email )

5717 Bessie Drive
Sarasota, FL 34233-2399
United States

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