Assessing Public Sector Efficiency: Issues and Methodologies

18 Pages Posted: 9 Mar 2012

See all articles by Francisco Pedraja-Chaparro

Francisco Pedraja-Chaparro

University of Extremadura

Javier Salinas-Jiménez

Instituto de Estudios Fiscales

Peter C. Smith

University of York - Centre for Health Economics

Date Written: March 31, 2005

Abstract

Methodological issues relevant when assessing the efficiency of public units are discusses by Pedraja-Chaparro, Salinas-Jiménez and Smith with reference to non-parametric approaches. First they note that public sector activities usually are aimed at achieving various goals other than efficiency, and that often there is a trade-off among various objectives. Output from public sector units is usually not traded on the market and public sector units do not face competition and the threat of bankruptcy. Consequently, the techniques employed to estimate efficiency scores should adjust to take into account problems in the measurement of outputs and inputs and uncertainty as regards the technology. Given its flexibility, data envelopment analysis seems an appealing approach to be used when addressing public sector efficiency.

Suggested Citation

Pedraja-Chaparro, Francisco and Salinas-Jiménez, Javier and Smith, Peter C., Assessing Public Sector Efficiency: Issues and Methodologies (March 31, 2005). Available at SSRN: https://ssrn.com/abstract=2018855 or http://dx.doi.org/10.2139/ssrn.2018855

Francisco Pedraja-Chaparro

University of Extremadura ( email )

Avenida de la Universidad s/n
Caceres, 10071
Spain

Javier Salinas-Jiménez (Contact Author)

Instituto de Estudios Fiscales ( email )

Avda Cardenal Herrera Oria, 378
Madrid, 28035
Spain

Peter C. Smith

University of York - Centre for Health Economics ( email )

Heslington
York YO10 5DD
United Kingdom

HOME PAGE: http://www.york.ac.uk/inst/che/psmith.htm

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