An Introduction to Efficiency and Productivity Analysis
The second edition of this book has been written for the same audience as the first edition. It is designed to be a "first port of call" for people wishing to study efficiency and productivity analysis. The book provides an accessible introduction to the four principal methods involved: econometric estimation of average response models; index numbers; data envelopment analysis (DEA); and stochastic firontier analysis (SFA). For each method, we provide a detailed introduction to the basic concepts, give some simple numerical examples, discuss some of the more important extensions to the basic methods, and provide references for further reading. In addition, we provide a number of detailed empirical applications using real-world data. The book can be used as a textbook or as a reference text. As a textbook, it probably contains too much material to cover in a single semester, so most instructors will want to design a course around a subset of chapters. For example, Chapter 2 is devoted to a review of production economics and could probably be skipped in a course for graduate economics majors. However, it should prove useful to undergraduate students and those doing a major in another field, such as business management or health studies.
This is the only book that provides a comprehensive and unified introduction to the main techniques used in this field: index number methods, data envelopment analysis (DEA) and econometric techniques, including stochastic frontier analysis (SFA) For each technique the basic methods are carefully described with the aid of numerous diagrams, simple empirical examples and computer output listings. The more advanced aspects of each technique are then discussed after the basic ideas are coveredThe DEA section has been updated to cover weights restrictions; super efficiency; bootstrapping; short run cost minimization; and profit maximizationThe productivity growth section has been updated to cover the issues of shadow prices and scale effectsIn addition, the parametric methods section has been updated to cover scope economies; confidence intervals; testing and imposing regularity conditions; and Bayesian methods