Evaluating the introduction of a quasi-market in community care

It is often the case that only routinely collected, highly aggregate administrative data are available for the purposes of evaluating major public policy initiatives. Such data clearly fall short of the information advocated by statisticians and economists for the purposes of policy evaluation. This paper examines the extent to which methodologies developed in the productivity literature can nevertheless extract useful evaluative information from administrative data. A non-parametric Malmquist Index approach is used that seeks to decompose changes in efficiency into technical efficiency changes, scale effects and technological change. The study applies the methods to the system of “community care” introduced in 1993 for people affected by problems associated with ageing, mental illness, learning disability or physical disability. Non-parametric methods are used to estimate productivity changes amongst 39 English county councils over a four-year period from 1992 to 1995. The results suggest a steady annual increase in productivity of about 1.4% per annum over the period under investigation, but it is not possible to determine the extent to which this progress can be attributed to the introduction of community care. The paper nevertheless concludes that the methods deployed can exploit readily available datasets at low cost, and are a valuable form of exploratory data analysis, if interpreted with discretion.