Economies of scale in public education: an econometric analysis

This article investigates the sources of scale economies in the production of public education. The relationship between the average cost of producing educational output and school characteristics including school and district size is estimated using a neoclassical cost function. The empirical analysis used panel data from Utah school districts and estimates the function using the covariance and error component models after making necessary corrections for heteroskedasticity and autocorrelation. The uncorrected fixed effects model generates a significant negative coefficient on district size in both the cost and expenditure functions; the coefficient on number of students has the hypothesized sign but is not significant in either equation. After making various corrections for autocorrelation and heteroskedasticity, the coefficients have the correct signs and are significant in all equations. Thus, it is concluded that scale economies arise from both sources but that the evidence is stronger for district size.     

An evaluation of the efficiency of Québec's school boards using the Data Envelopment Analysis method

In this paper the efficiency of Québec's school boards during a period of severe cutbacks in their finance is examined. Using Data Envelopment Analysis, the average efficiency is found to be relatively high. In spite of this, potential savings could be achieved if school boards were fully efficient. Results were found to depend heavily on school boards’ socio- economic conditions, thus they were subjected to Tobit analysis and the boards’ corrected efficiencies recalculated. It is concluded that inefficiencies cost 800 million dollars of which 200 million dollars come from unfavourable socio-economic conditions.     

Efficiency and Equity in School Funding: A Case Study for Kansas

This study measures cost inefficiency of Kansas public school districts and applied both mathematical programming and stochastic frontier approach. The empirical study uses two-stage data envelopment analysis model and the cost inefficiency effects model proposed by Battese and Coelli (Empirical Economics 24:325–332, 1995) and applied to a panel data. The results found mean inefficiencies from these two models are very close. The results indicate that Kansas school districts, on average, exhibit cost inefficiency in their operations, however, there is a tendency for inefficiencies to decline over time. The study does not find any strong evidence for lower efficiency due to lower expenditure per-pupil. Instead, we found inconclusive evidences where lower efficiency for certain school districts could be assigned to unfavorable environmental cost conditions.

Cost efficiency and scale economies in the Turkish insurance industry

This article examines the cost efficiency and scale economies of insurance firms in the Turkish insurance industry over a 15-year period, 1990–2004. Using the stochastic cost frontier model, cost efficiency scores and scale economies were estimated for each firm in the sample. The results show that mean cost inefficiencies range between 18.3 and 36.9% of total costs and they do not tend to decrease over time. On average, small firms are more cost efficient than large firms. Economies of scale appear present and significant for any class size. The results suggest that there is a substantial difference in scale economies between small and large insurance firms.     

Regression analysis on the variation in efficiency frontiers for prevention stage of HIV/AIDS

Abstract

Objectives:

To investigate how the cost effectiveness of preventing HIV/AIDS varies across possible efficiency frontiers (EFs) by taking into account potentially relevant external factors, such as prevention stage, and how the EFs can be characterized using regression analysis given uncertainty of the QALY-cost estimates.

Methods:

We reviewed cost-effectiveness estimates for the prevention and treatment of HIV/AIDS published from 2002–2007 and catalogued in the Tufts Medical Center Cost-Effectiveness Analysis (CEA) Registry. We constructed efficiency frontier (EF) curves by plotting QALYs against costs, using methods used by the Institute for Quality and Efficiency in Health Care (IQWiG) in Germany. We stratified the QALY-cost ratios by prevention stage, country of study, and payer perspective, and estimated EF equations using log and square-root models.

Results:

A total of 53 QALY-cost ratios were identified for HIV/AIDS in the Tufts CEA Registry. Plotted ratios stratified by prevention stage were visually grouped into a cluster consisting of primary/secondary prevention measures and a cluster consisting of tertiary measures. Correlation coefficients for each cluster were statistically significant. For each cluster, we derived two EF equations – one based on the log model, and one based on the square-root model.

Discussion:

Our findings indicate that stratification of HIV/AIDS interventions by prevention stage can yield distinct EFs, and that the correlation and regression analyses are useful for parametrically characterizing EF equations. Our study has certain limitations, such as the small number of included articles and the potential for study populations to be non-representative of countries of interest. Nonetheless, our approach could help develop a deeper appreciation of cost effectiveness beyond the deterministic approach developed by IQWiG.     

Corporate governance and efficiency in banking: evidence from emerging economies

ABSTRACT

This article investigates the impact of corporate governance on bank efficiency across a sample of 139 commercial banks from 17 countries of Central and Eastern Europe during the period 2005–2012. Data on governance characteristics are hand-collected from banks’ reports. The empirical findings indicate that implementing rigorous corporate governance structures is associated with higher costs for banks and a lower level of efficiency. However, during the crisis, a tight governance mechanism significantly increases banks’ cost and technical efficiencies. We also show that prudent risk management is associated with both higher cost and technical efficiency for more capitalized banks, while rigid supervisory boards are linked with greater technical efficiency for more capitalized banks.     

Efficiency analysis of German electricity distribution utilities – non-parametric and parametric tests

This study applies non-parametric and parametric tests to assess the efficiency of electricity distribution companies in Germany. Traditional issues in electricity sector benchmarking are addressed, such as the role of scale effects and optimal utility size, as well as new evidence specific to the situation in Germany. Labour, capital, and peak load capacity are used as inputs, and units sold and the number of customers as output. The data cover 307 (out of 553) German electricity distribution utilities. A data envelopment analysis (DEA) is applied with constant returns to scale (CRS) as the main productivity analysis technique, whereas stochastic frontier analysis (SFA) with distance function is the verification method. The results suggest that returns to scale play but a minor role; only very small utilities have a significant cost advantage. Low customer density is found to affect the efficiency score significantly, in particular in the lower third of all observations. Surprisingly, East German utilities feature a higher average efficiency than their West German counterparts. The correlation tests imply a high coherence of the results.     

Cost-impact of cardiac magnetic resonance imaging with Fast-SENC compared to SPECT in the diagnosis of coronary artery disease in the U.S

Aims: The purpose of this study is to assess the economic cost differences and the associated treatment resource changes between the developing coronary artery disease (CAD) diagnostic tool fast strain-encoded cardiac imaging (Fast-SENC) and the current commonly used stress test single-photon emission computed tomography (SPECT).

Materials and methods: A “payer perspective” model was created first, consisting of long-term and short-term components that used a hypothetical cohort of patients of average age (60.8?years) presenting with chest pain and suspected CAD to assess cost-impact. A cost impact model was then built that assessed likely savings from a “hospital perspective” from substituting Fast-SENC for a portion of SPECTs assuming an average number of annual SPECT tests performed in US hospitals.

Results: In the payer model, using Fast-SENC followed by coronary angiography (CA) and percutaneous coronary intervention (PCI) treatment when necessary is less costly than the SPECT method when considering both direct and indirect costs of testing. Expected costs of the Fast-SENC were between $2,510 and $2,632 per correct diagnosis, while expected costs for the SPECT were between $3,157 and $4,078. Fast-SENC reduced false positives by 50% and false negatives by 86%, generating additional cost savings. The hospital model showed total costs per CAD patient visit of $825 for SPECT and $376 for Fast-SENC.

Limitations: Limitations of this study are that clinical data are sourced from other published clinical trials on how CAD diagnostic strategies impact clinical outcome, and that necessary assumptions were made which impact health outcomes.

Conclusion: The lower cost, higher sensitivity and specificity rates, and faster, less burdensome process for detecting CAD patients make Fast-SENC a more capable and economically beneficial stress test than SPECT. The payer model and hospital model demonstrate an alignment between payer and provider economics as Fast-SENC provides monetary savings for patients and resource benefits for hospitals.     

School Finance Induced Migration and Stratification Patterns: The Impact of Private School Vouchers

This paper introduces a general equilibrium model of public school finance that includes: (i) multiple school districts that finance local public schools via property taxes set by majority vote; (ii) multiple neighborhoods within school districts where each neighborhood is characterized by a quality level of housing; (iii) local public schools that are obligated to admit all interested students who reside within the school district; (iv) private schools that function as clubs of parents who share the cost of the private school equally and who can choose to exclude others; (v) an educational production process that depends on both per pupil spending and average peer quality within the school; and (vi) individual peer quality levels that are correlated with the socioeconomic status of households. Since it allows for various degrees of imperfect stratification of residents across communities, the model is well suited for investigating empirically relevant migration forces induced by school finance reform proposals. The abstract model itself, however, is too complex to yield many analytic results. A computational counterpart to the model isnb therefore developed, calibrated to data, and utilized for policy experiments. In particular, the impact of vouchers in the context of different types of prevoucher educational finance systems is investigated, and it is found that migration patterns in general would cause vouchers to benefit public schools in poor communities while hurting public schools in wealthy communities.     

Pursuing efficiency: a data envelopment analysis of MFIs in Latin America

This article analyses the overall profitability efficiency (PE) of Microfinance Institutions (MFIs) in Latin America. The PE of each MFI in the study is broken down into two components: pure technical efficiency and scale efficiency. One data envelopment model is used to analyse each component. Each MFI was labelled as either a bank, cooperative and credit union, nonbanking financial institution or non-governmental organization, and then the analysis was performed on each separate group. The results suggest that, on average, banks are the most efficient MFIs; while NGOs are, on average, the least efficient MFIs. On average, all 4 groups are more pure technically efficient than scale efficient. Banks, nongovernmental organizations, nonbanking financial institutions, cooperatives and credit unions all seem to have problems with scale efficiency. Many MFIs seem to be operating on the increasing returns to scale frontier and are in a more favourable position for expansion.     

COST FUNCTIONS AND COST EFFICIENCY IN ELECTRICITY DISTRIBUTION: A STOCHASTIC FRONTIER APPROACH*

The paper develops a cost frontier model of electricity distribution and estimates it on data for the 12 regional electricity companies of England and Wales. It is found that some significant cost drivers in cross-section estimation are insignificant when the model is estimated on panel data, highlighting the well-known drawbacks of cross-section estimation. Panel data estimation suggests that the main determinants of distribution operating costs are the number of customers in the area and simultaneous maximum demand. These results and the efficiency rankings of the companies are not sensitive to changes in error distribution assumptions and sample size. There is also significant evidence of economies of scale. There is a small but significant effect on cost efficiency from privatization, but this is as likely to be due to the changes in accounting policies at the time of privatization as any real effect.     

An operational,nonlinear input–output system

We develop a scale-dependent nonlinear input–output model which is a practical alternative to the conventional linear counterpart. The model contemplates the possibility of different assumptions on returns to scale and is calibrated in a simple manner that closely resembles the usual technical coefficient calibration procedure. Multiplier calculations under this nonlinear version offer appropriate interval estimates that provide information on the effectiveness and variability of demand-driven induced changes in equilibrium magnitudes. In addition, and unlike linear multipliers, the nonlinear model allows us to distinguish between physical and cost effects, the reason being that the traditional dichotomy between the price and quantity equations of linear models no longer holds. We perform an empirical implementation of the nonlinear model using recent interindustry data for Brazil, China and United States. When evaluating the robustness of the derived marginal output multipliers and the induced cost effects under the nonlinear approach, the results indicate that marginal indicators in physical terms can be perfectly used to infer average impacts; this is not the case, however, for the derived cost effects where average measures are seen to be more adequate. At the computational level, the analysis proves the operational applicability of the nonlinear system while at the methodological level shows that scale effects are relevant in determining sectoral multipliers.     

中国产险公司的投资业务对经营效率的影响研究

文章主要研究了财产保险公司发展“非传统”的投资业务对经营效率的影响。文章首先通过一个理论模型来说明产险公司的投资功能如何与风险汇聚和损失补偿功能相联系并影响公司经营成果,然后利用2009－2013年中国44家产险公司的面板数据进行了实证分析。研究发现：由于存在范围经济和交叉补贴效应,发展投资业务显著正向影响了产险公司的成本效率;而由于投资收益率不高且投资比例受限,发展投资业务对利润效率的影响方向不确定且效应不显著。这些结论在分样本回归中以及控制了规模变量可能的内生性和非线性效应后仍成立。文章建议监管层逐步放弃投资比例等硬性指标,而更多地关注资本监管和偿付能力监管,提高监管的灵活性。     

Cost efficiency and banking performances in a partial universal banking system: application of the panel smooth threshold model

This paper studies the cost efficiency of bank in a partial universal banking system (PUBS), Taiwan. Instead of assuming one common technology in the bank cost function, two technologies are assumed to be imbedded in the cost function. Fee revenues are used as threshold to divide the banks into two technologies. A bank whose fee revenues exceeding the threshold is designated as universal bank technology while falling below the threshold is designated as traditional deposit-loan technology. The panel smooth transition model is adopted, which allows banks to smoothly adjust between the two technologies. Two criteria are suggested, overbanking and the trend-toward-fee revenues, to assess the new model's performances. With respect to scale economies, the results do find a panel smooth transition model yield more reasonable results than the conventional OLS and random effect of panel data approach. Based on the panel smooth transition model, the optimal fixed asset size is around ten billion New Taiwan dollars.     

中国城市公园的标度律特征分析

科学研判城市公园面积与人口规模的关系,有利于 客观认识和指导城市的可持续发展。采用1996—2019年中 国291个地级及以上城市公园面积与人口规模数据,探究二者 之间的标度关系及其标度因子的时空演化规律,进而采用基于 标度律的公园规模修正模型度量各城市公园面积达到预期值的 程度,并对规模修正指标和人均公园面积进行比较分析,得到 如下结果。1)我国公园面积与人口规模整体呈亚线性规模缩 放关系,公园具有显著规模效应,符合城市标度律特征;时间 上呈现亚线性-超线性-亚线性的阶段性波动演变特征,空间 上分异明显：华南接近线性标度关系,华中、东北、华北、西 南呈典型亚线性关系,华东、西北呈亚线性,但标度因子偏离 度较大。2)大城市在人均公园面积排序中相对靠后,在考虑 规模效应后,排名普遍提高,说明规模修正指标能在消除人口 规模影响的基础上,有效衡量不同规模城市公园面积的水平。 标度律视角下的城市公园规模测度能够为城市人口管理和公园 面积发展的决策提供科学指导,为不同规模城市公园建设提供 可借鉴的比较标准,促进公园与人口的协调发展。     

什么决定了中国商业银行的净利差?

:本文运用Ho和Saunders(1981)提出的银行净利差(netinterestmargin)决定因素的理论模型并进行拓展,引入了平均运营成本、资产规模和其它因市场不完美引起的因素,采用1996—2003年间的面板数据,运用固定效应模型对中国商业银行的净利差决定因素进行了实证分析。结果发现决定净利差的因素包括:市场竞争结构、平均运营成本、风险厌恶程度、贷款比率、交易规模、隐含利息支付、准备金的机会成本、管理效率、资产规模等。实证结果不仅对商业银行本身提高经营管理水平和增加利润具有重要的价值,而且对政府监管部门制定政策提高社会福利具有一定的指导意义。文章最后根据实证分析结果提出了一些政策含义。     

Efficiency of hospitals in Germany: a DEA-bootstrap approach

Various attempts to assess the performance of German hospitals have generated a wide range of estimates regarding their efficiency. These attempts were based on different, often rather small data sets consisting of heterogeneous hospitals; the techniques applied range from simple benchmarking approaches to studies which employ Data Envelopment Analysis (DEA). Some studies report ‘dramatic differences in efficiency’ and propose savings potentials of 50%; others find an average efficiency in excess of 95% and characterize almost 75% of their observations as fully efficient. This study presents results for two datasets representative of two segments of the German hospital system. These segments comprise all hospitals that have one internal medicine and one surgery department; the hospitals are located in the old federal states of Germany. None of the hospitals provides tertiary care. DEA can be applied because all hospitals offer a comparable quality and range of services. The results were estimated with a DEA-bootstrapping procedure and suggest an average bias–corrected efficiency of around 80%.     

Estimating technology in the postal sector: a Bayesian approach

The aim of this article is to study the technology of the sector represented by the Spanish national post-office and telegraph service, Sociedad Estatal Correos y Telégrafos, S.A. trading as Correos, and denominated as such hereafter. Concretely, we analyse economic efficiency (technical and allocative) and scale economies of the production units (cost centres) of Correos. To do this, we employ a methodology based on an input distance function which is the dual of the cost function. Moreover, and applying duality theory, we develop an economic model to assess the effect of postal infrastructures on the operators’ costs. In order to carry out the empirical model, Bayesian econometrics is applied to estimate the parameters in the input distance function and the technical and allocative efficiency terms.     

Cost effectiveness of rimonabant use in patients at increased cardiometabolic risk: estimates from a Markov model

Summary

Rimonabant, the first selective CB-1 receptor blocker, is expected to reduce cardiometabolic risk substantially. This study assesses the economics of such treatment in patients at elevated cardiometabolic risk.

A Markov model was developed using data from the Rimonabant in Obesity (RIO) trial, published risk equations, and UK cost and utility data. Patients begin either in a diabetic or a non-diabetic state and can transition to cardiovascular disease or to death (based on UK life tables). Transitions to diabetes and subsequent cardiovascular events are also counted. Resource use due to events and long-term management were translated to UK costs (2005 GBP). Tariffs for events and states were applied to age-dependent utilities. Extensive univariate and multivariate probabilistic sensitivity analyses were carried out.

Over 10 years, 8% will suffer a cardiovascular event with a loss of more than 1,000 quality-adjusted life years (QALYs) and a cost of more than £500,000 per 1,000 patients. Projecting risk for a lifetime, 1 year of rimonabant use is estimated to gain >65 QALYs at £8,574/QALY. In probabilistic sensitivity analysis, incremental cost-effectiveness ratios varied from £2,657 to £22,141/QALY.

Based on the metabolic effects seen in clinical trials, rimonabant should reduce cardiovascular risk in obese or overweight people at reasonable cost.     

Quality of life benefits and cost impact of prolonged release oxycodone/naloxone versus prolonged release oxycodone in patients with moderate-to-severe non-malignant pain and opioid-induced constipation: a UK cost-utility analysis

Abstract

Objective:

To compare the cost effectiveness of prolonged release oxycodone/naloxone (OXN) tablets (Targinact) and prolonged release oxycodone (OXY) tablets (OxyContin) in patients with moderate-to-severe non-malignant pain and opioid-induced constipation (OIC) from the perspective of the UK healthcare system.

Methods:

A cohort model used data from a phase III randomised, controlled trial (RCT). It calculated the cost difference between treatments by combining the cost of pain therapy with costs of laxatives and other resources used to manage constipated patients. SF-36 scores were converted into EQ-5D utility values to calculate the quality-adjusted life-year (QALY) gains. Deterministic and probabilistic sensitivity analyses were performed.

Results:

The incremental cost of OXN versus OXY was £159.68 for the average treatment duration of 301 days. OXN gave an incremental QALY gain of 0.0273. The estimated incremental cost-effectiveness ratio (ICER) was £5841.56 per QALY. Sensitivity analyses gave a maximum ICER of £10,347.03. In some scenarios, OXN dominated with a cost saving of up to £4254.70. Probabilistic sensitivity analysis showed that OXN had approximately 96.6% probability of cost effectiveness at the £20,000 threshold.

Limitations:

The model was conservative in predicting the probability of constipation beyond the 12-week RCT period. UK cost of constipation data were limited and based on primary care physician opinion.

Conclusions:

In the base case, direct treatment costs were slightly higher for patients treated with OXN than for those treated with OXY. However, patients treated with OXN experienced a quality of life gain, and had an ICER considerably below thresholds commonly applied in the UK. The model was most sensitive to the estimated cost of constipation with a number of realistic scenarios in the sensitivity analysis demonstrating a cost saving with OXN (OXN dominant). OXN is therefore estimated to be a cost-effective option for treating patients with severe non-malignant pain and OIC.