In this paper we propose a semiparametric Bayesian framework for the analysis of stochastic frontiers and efficiency measurement. The distribution of inefficiencies is modelled nonparametrically through a Dirichlet process prior. We suggest prior distributions and implement a Bayesian analysis through an efficient Markov chain Monte Carlo sampler, which allows us to deal with practically releva...

Data Envelopment Analysis (DEA) is the methodology for evaluating the relative productive efficiency of decision making units (DMUs) that produce multiple-outputs using multiple-inputs. DEA was proposed for the first time in 1957 by Farrell; nonetheless, the wide usage of this method begun with its generalization and the linear programming formulation which is due to Charnes et al. (1978) (for ...

In this paper we consider the Weibull distribution as a model for technical efficiency. The distribution has a shape and scale parameter like the gamma distribution and can be a reasonable competitor in practice. The techniques are illustrated using artificial data as well as a panel of Spanish dairy farms.

The efficiency of social housing providers is a contentious issue. In the Netherlands, there is a widespread belief that housing corporations have substantial potential for efficiency improvements. A related question is whether scale influences efficiency, since recent decades have shown a trend of mergers among corporations. This paper offers a framework to assess the effects of scale and merg...

This paper analyzes the efficiency of the Brazilian banking sector over the post-privatization period of 2000-2007. We employ a Bayesian stochastic frontier approach, which provides exact efficiency estimates and confidence intervals and thus, allows an accurate comparison across institutions and bank groups. The results suggest that large banks are the most cost and profit efficient, supportin...

Since the Labour government came to power in 1997, it has introduced a regime whereby public services are accountable in respect of best value performance indicators (BVPIs). A recent Public Services Productivity Panel (PSP) (2000) report has developed a set of criteria whereby the economic analysis of police force efficiency by the Home Office is to be made standard. In this paper we utilise a...

In this paper we develop and implement a methodology for analysing the sources of variation in environmental efficiency across producers. We formulate a two-stage model. In the first stage we use stochastic frontier analysis to estimate both technical and environmental efficiency. In the second stage we again use stochastic frontier analysis to regress estimated environmental efficiency scores ...

This study uses a generalized stochastic frontier framework to model a multiple-output rice production system and analyses farm-level technical inefficiency of rice farming in Assam, India. Primary data for this study was collected in 2009-2010 from 310 farm-households in four non-contiguous districts of Dhubri, Morigaon, Dibrugarh, and Cachar that are located in different agro-climatic regions...

The purpose of this paper is to quantify the efficiency with which Australian universities utilise their teaching resources. The study estimates the cost efficiency of 36 universities over the period 1995-2002 using stochastic frontier analysis. The present study differs from previous cost and efficiency studies of Australian universities in two respects. First, it employs stochastic frontier a...

In recent years, WHO and other individual researchers have advocated estimation of health system performance through stochastic frontier models. It provides an idealized yardstick to evaluate economic performance of health system. So far attempts in India have remained focused at state level analysis. This paper attempts a sub-state level analysis for an affluent Indian state, namely Punjab, by...