An Introduction to Efficiency and Productivity Analysis

1. Introduction.- 1.1 Introduction.- 1.2 Some Informal Definitions.- 1.3 Overview of Methods.- 1.4 Outline of Chapters.- 1.5 What is Your Economics Background?.- 2. Review of Production Economics.- 2.1 Introduction.- 2.2 Production Functions.- 2.3 Price Information and Cost Minimisation and Profit Maximisation.- 2.4 Econometric Estimation of Production Functions.- 2.5 Conclusions.- 3. Additional Topics in Production Economics.- 3.1 Introduction.- 3.2 Duality in Production.- 3.3 Econometric Estimation of Cost and Profit Functions.- 3.4 Multi-output Production and Distance Functions.- 3.5 Conclusions.- 4. Index Numbers and Productivity Measurement.- 4.1 Introduction.- 4.2 Conceptual Framework and Notation.- 4.3 Formulae for Price Index Numbers.- 4.4 Quantity Index Numbers.- 4.5 Properties of Index Numbers: The Test Approach.- 4.6 A Simple Numerical Example.- 4.7 Transitivity in Multilateral Comparisons.- 4.8 TFP Measurement Using Index Numbers.- 4.9 Empirical Application: Australian National Railways.- 4.10 Conclusions.- 5. Economic Theory and Index Numbers.- 5.1 Introduction.- 5.2 Decomposition of a Simple TFP Index.- 5.3 The Economic-Theoretic Approach: Some Preliminaries.- 5.4 Output Price Indices.- 5.5 Input Price Indices.- 5.6 Output Quantity Indices.- 5.7 Input Quantity Indices.- 5.8 Productivity Indices.- 5.9 Malmquist Productivity Index: Some Additional Issues.- 5.10 Conclusions.- 6. Efficiency Measurement Using Data Envelopment Analysis (DEA).- 6.1 Introduction.- 6.2 Efficiency Measurement Concepts.- 6.3 The Constant Returns to Scale (CRS) DEA Model.- 6.4 The Variable Returns to Scale (VRS) Model and Scale Efficiencies.- 6.5 Input and Output Orientations.- 6.6 Conclusions.- 7. Additional Topics on Data Envelopment Analysis.- 7.1 Introduction.- 7.2 Price Information and Allocative Efficiency.- 7.3 Adjusting for Environment.- 7.4 Non-Discretionary Variables.- 7.5 Input Congestion.- 7.6 Treatment of Slacks.- 7.7 Empirical Application: Australian Universities.- 7.8 Conclusions.- 8. Efficiency Measurement Using Stochastic Frontiers.- 8.1 Introduction.- 8.2 The Stochastic Frontier Production Function.- 8.3 Maximum-Likelihood Estimation.- 8.4 Estimation of Mean Technical Efficiency.- 8.5 Prediction of Firm-level Technical Efficiencies.- 8.6 Tests of Hypotheses.- 8.7 A Simple Numerical Example.- 8.8 Conclusions.- 9. Additional Topics on Stochastic Frontiers.- 9.1 Introduction.- 9.2 Truncated-Normal Distribution.- 9.3 Alternative Functional Forms.- 9.4 Panel Data Models.- 9.5 Time-varying Inefficiency Model.- 9.6 Modeling Inefficiency Effects.- 9.7 Duality and Modeling of Allocative Efficiencies.- 9.8 Empirical Application: Wheat Farming in South Africa.- 9.9 Conclusions.- 10. Productivity Measurement Using Efficiency Measurement Methods.- 10.1 Introduction.- 10.2 The Malmquist TFP Index.- 10.3 Two Estimation Methods.- 10.4 Empirical Application: Australian Electricity Generation.- 10.5 Conclusions.- 11. Conclusions.- 11.1 Summary of Methods.- 11.2 Relative Merits of the Methods: Some Comments.- 11.3 Some Final Points.- Appendix: Computer Software.- References.- Author Index.