scholarly journals Production and scale efficiency of South African water utilities: the case of water boards

Water Policy ◽  
2021 ◽  
Author(s):  
Victor Ngobeni ◽  
Marthinus C. Breitenbach
Keyword(s):  
South Africa ◽  
Technical Efficiency ◽  
Returns To Scale ◽  
Water Utilities ◽  
Scale Efficiency ◽  
Undesirable Output ◽  
Water Losses ◽  
Water Board ◽  
Bad Outputs ◽  
Water Boards

Abstract South Africa is a water scarce country with deteriorating water resources. Faced with tight fiscal and water resource constraints, water utilities would have to adopt technically efficient water management technologies to meet developmental socio-economic objectives of universal coverage, aligned to the United Nation's Sustainable Development Goal 6. It is important to measure the technical efficiency of utilities as accurately as possible in order to inform policy. We do this by using a non-parametric method known as Data Envelopment Analysis to determine, measure, analyse and benchmark the technical efficiency of all water boards in South Africa. Our contribution to the literature is twofold: This is the first paper to model technical efficiency of water boards as utility suppliers and guardians of water services in South Africa, and second, we address the over- and underestimation issues of technical efficiency measurement in the water sector. We do this by modelling one of the most pronounced negative externalities from water provision (water losses) as an undesirable output using the approach developed by You & Yan. We find, on average, technical efficiency of water boards is 49%, with only three of the nine water boards technically efficient. Six of the smaller water boards showed high levels of inefficiency with an inefficiency rate of 51%, which is equivalent to wastage in expenditure of R3.7 billion. Six water boards operate at increasing returns to scale and two are scale efficient. Only Rand and Sedibeng water boards exhibited decreasing returns to scale. Therefore, redirecting potential efficiency savings to optimal uses could result in technical and scale efficiency for the sector. Scale efficiency results seem to support larger regional water boards as small- to medium-sized water boards are scale inefficient with low technical efficiency. For example, Amatola Water (small water board) with an efficiency score of only 16% has a total expenditure of 18% of that of Umgeni (large water board), but sells only 6.7% of the quantity sold by Umgeni. Amatola also has seven times the proportion of water losses compared with Umgeni and charges 1.6 times the tariff of Umgeni. The ratio model with an undesirable output outperforms previous methods to deal with undesirable (bad) outputs, which either provide an over- or underestimation of technical efficiency.

scholarly journals The cost of banking services and the technical efficiency of a South African bank

2008 ◽  
Vol 4 (2) ◽  
Author(s):  
Gert J Van der WSesthuizen ◽  
Chris Van Heerden
Keyword(s):  
South Africa ◽  
South African ◽  
Technical Efficiency ◽  
Returns To Scale ◽  
Scale Efficiency ◽  
Data Envelopment ◽  
Banking Services ◽  
Input And Output ◽  
The Cost ◽  
Variable Returns To Scale

Does the performance of one of the four largest banks in South Africa justify the customers’ complaints about the higher bank fees? Data Envelopment Analysis (DEA) was used to estimate the technical efficiency and returns to scale of one of the largest banks in South Africa. The intermediation approach was applied to classify the inputs and outputs and the analyses were conducted with both input- and output- orientation under variable returns to scale. Returns to scale efficiency and technical efficiency for 37 districts over a period of 22 months were estimated. The analyses indicated that 19 districts out of the 37 districts were never fully technically efficient during the 22 months (input- and output-orientated). It appears that customers’ complaints about high service fees are justified.

scholarly journals Does Farm Size and Specialization Matter for Productive Efficiency? Results from Kansas

2011 ◽  
Vol 43 (4) ◽  
pp. 515-528 ◽  
Author(s):  
Amin W. Mugera ◽  
Michael R. Langemeier
Keyword(s):  
Data Envelopment Analysis ◽  
Technical Efficiency ◽  
Production Technology ◽  
Returns To Scale ◽  
Productive Efficiency ◽  
Farm Size ◽  
Scale Efficiency ◽  
Data Envelopment ◽  
Sample Period ◽  
Analysis Techniques

In this article, we used bootstrap data envelopment analysis techniques to examine technical and scale efficiency scores for a balanced panel of 564 farms in Kansas for the period 1993–2007. The production technology is estimated under three different assumptions of returns to scale and the results are compared. Technical and scale efficiency is disaggregated by farm size and specialization. Our results suggest that farms are both scale and technically inefficient. On average, technical efficiency has deteriorated over the sample period. Technical efficiency varies directly by farm size and the differences are significant. Differences across farm specializations are not significant.

scholarly journals A comparative study of efficiency and its determinants in Islamic, conventional, and socially responsible banks

2016 ◽  
Vol 13 (4) ◽  
pp. 470-482 ◽  
Author(s):  
Majed Alharthi
Keyword(s):  
Financial Crisis ◽  
Technical Efficiency ◽  
Returns To Scale ◽  
Scale Efficiency ◽  
Islamic Banks ◽  
Socially Responsible ◽  
Market Capitalization ◽  
Efficiency Measures ◽  
Conventional Banks ◽  
Constant Returns To Scale

This study empirically estimates efficiency and its determinants in 190 Islamic (IBs), conventional (CBs), and socially responsible banks (SRBs) in 22 countries during the period 2005-2012. The study first uses non-parametric approaches to estimate the efficiency measures (scale efficiency (SE), technical efficiency-constant returns to scale (CRS), and technical efficiency-variable returns to scale (VRS)) and second employs ordinary least squares, fixed effects, random effects, and TOBIT models to get the efficiency determinants. The findings indicate that the average efficiency is 0.966, 0.952, and 0.983 for the SE, CRS, and VRS, respectively. However, efficiency measures show that the SRBs are most efficient banks whereas, the least efficiency scores archived by Islamic banks. Islamic bank efficiency is positively correlated with size, loan intensity, ROA, inflation rates, market capitalization and financial crisis. However, conventional banks’ TE and CRS efficiency are positively and significantly correlated with size, ROA, and market capitalization, while their VRS efficiency is negatively and significantly related to capital ratio, age and GDP. In addition, SRBs’ efficiency is increased by size, capital ratio, loan intensity, ROA, foreign ownership, domestic ownership, inflation and financial crisis. Furthermore, the financial crisis affects the SE and CRS efficiency measures in Islamic banks while socially responsible banks SE efficiency measure is positively affected by the financial crisis, which means that socially responsible banks were stabled and resisted during the crisis period. Finally, there is no significant correlation between financial crisis and efficiency indictors in conventional banks during the period

scholarly journals Efficiency of Micro and Small Enterprises in Ethiopia: Evidence from Data Envelope Analysis Model

2021 ◽  
Author(s):  
Abebe Birhanu Ayele
Keyword(s):  
Technical Efficiency ◽  
Service Sector ◽  
Returns To Scale ◽  
Least Square ◽  
Scale Efficiency ◽  
Small Enterprises ◽  
Analysis Model ◽  
Micro And Small Enterprises ◽  
The Government ◽  
Constant Returns To Scale

This study measures the technical and scale efficiency of Micro and Small Enterprises (MSEs) and input slacks using Data Envelop Analysis (DEA) model and identifies the determinants of efficiencies of MSEs by employing ordinary least square (OLS) econometrics model. A sample of 375 randomly selected MESs are included in the study. The study found that the average technical and scale efficiency of MSEs are relatively low; technical efficiency averaged at 30 percent and 38.4 percent under constant returns to scale (CRS) and variable returns to scale (VRS) assumptions, respectively. Besides, the overall average scale efficiency score of MSEs was estimated at 77.8 percent. The highest mean technical and scale efficiencies were registered in the construction (71.8 percent) and manufacturing (85.7 percent) sectors, respectively. Whereas, the lowest technical and scale efficiency goes to urban agriculture sector and service sector, with 38.9 percent and 67.2 percent, respectively. The level of inputs, enterprise age and sector, human capital, labor productivity variables significantly affect relative technical efficiency level of MSEs with different directions while variables such as start-up capital, gender of the enterprise manager and availability of support from the government identified statistically not significant in determining the MSEs’ technical efficiency.

Efficiency of glass firms in India: an application of data envelopment analysis

2016 ◽  
Vol 13 (1) ◽  
Author(s):  
Mini Kundi ◽  
Seema Sharma
Keyword(s):  
Data Envelopment Analysis ◽  
Technical Efficiency ◽  
Design Methodology ◽  
Large Scale ◽  
Returns To Scale ◽  
Scale Efficiency ◽  
Data Envelopment ◽  
Efficiency Measures ◽  
Target Values ◽  
Practical Implications

Purpose The purpose of the present study is to evaluate the efficiency of glass firms in India. Design/methodology/approach Data envelopment analysis (DEA) has been employed to study the technical, scale and super efficiency measures of glass firms in India. Findings Major findings of DEA analysis show that 65 percent firms are found to be technically efficient. Returns to scale analysis indicate that five firms are operating at decreasing returns to scale and two firms are exhibiting increasing returns to scale. Further, results show that small– and medium–scale firms are more efficient than large–scale firms. Old firms are more efficient compared to the young firms and foreign-owned firms are technically more efficient compared to the domestic firms. Practical implications The results of this study would help the managers to assess their relative efficiency and take corrective measures to efficiently use their resources. Originality/value This seems to be the first study to apply DEA to analyze the efficiency of glass firms in India. No previous study on glass industry seems to have decomposed the measure of overall technical efficiency into its components, namely pure technical efficiency and scale efficiency and no study seems to have examined whether ownership, age and size of a firm are significant for its efficiency. In addition, no earlier study seems to have ranked the glass firms based on their efficiency values. Further, target values of inputs and outputs are demonstrated in this study. Stability of efficiency scores is also checked.

scholarly journals On Service Efficiency of Public Traditional Chinese Medicine (TCM) Hospitals of Hubei Province in 2017

2021 ◽  
Vol 271 ◽  
pp. 04039
Author(s):  
Yang Ke ◽  
Shuai Li-Na ◽  
Li Na ◽  
Chen Li
Keyword(s):  
Technical Efficiency ◽  
Returns To Scale ◽  
Hubei Province ◽  
Scale Efficiency ◽  
Management Information ◽  
Local Conditions ◽  
Policy Suggestions ◽  
Service Efficiency ◽  
Central Regions ◽  
Better Than

In order to put forward policy suggestions for improving the service efficiency of public TCM hospitals in Hubei Province, the statistics of 94 public TCM hospitals of Hubei Province in 2017 was collected by using the comprehensive statistical management information system of TCM there, and the service efficiency of TCM hospitals was analyzed with the DEA-BCC model. The research showed, in 2017, the average technical efficiency, pure technical efficiency and scale efficiency of public TCM hospitals in Hubei Province were 0.919, 0.939 and 0.979 respectively. There were 27.7% of hospitals with effective DEA, 39.4% with effective pure technical efficiency, 31.9% with effective scale efficiency, and 61.7% of public TCM hospitals with diminishing returns to scale. The pure technical efficiency is an important factor restricting the effective DEA of TCM hospitals in Hubei Province, and the scale efficiency also has to be improved. The service efficiency of grade Ⅱ hospitals of TCM are better than that of grade III, and hospitals in central regions are better than that of eastern and western regions. Therefore, local hospitals should take tailored reforms to improve service efficiency according to local conditions.

scholarly journals Applying DEA in Analysing the Efficiency of Top Manufacturing Companies in Pakistan

2011 ◽  
Vol 1 (2) ◽  
pp. 225
Author(s):  
Izah Mohd Tahir ◽  
Mehran Ali Memon
Keyword(s):  
Technical Efficiency ◽  
Returns To Scale ◽  
International Markets ◽  
Scale Efficiency ◽  
Data Envelopment ◽  
Manufacturing Companies ◽  
Critical Elements ◽  
Input Variables ◽  
Constant Returns To Scale ◽  
Variable Returns To Scale

The efficiency of manufacturing companies is one of the critical elements for its competitiveness in the domestic as well as international markets. Previous research on efficiency measurement usually adopts Data Envelopment Analysis (DEA) approach. Therefore this paper is aimed to analyse the efficiency of 14 top manufacturing companies in Pakistan for a five year period from 2006 to 2010. Data of top 14 manufacturing companies are gathered from OSIRIS database. DEA method is applied using both the Constant Returns to Scale (CCR) and Variable Returns to Scale (BCC) models to find the overall efficiency, technical efficiency and scale efficiency. In this paper we use two input variables (total expenses and total assets) and two output variables (sales and profit before tax). The results under CCR method show that only one company is considered technically efficient while the average overall technical efficiency varies from 0.64 to 0.99. Company number 5 (NRL) demonstrates the best performance for all years under study.

scholarly journals Dynamic efficiency in Lithuanian cereal farms

2016 ◽  
Vol 38 (2) ◽  
pp. 114-127 ◽  
Author(s):  
Tomas Baležentis
Keyword(s):  
Technical Efficiency ◽  
Structural Changes ◽  
Returns To Scale ◽  
Adjustment Cost ◽  
Scale Efficiency ◽  
Dynamic Efficiency ◽  
Family Farms ◽  
Technical Inefficiency ◽  
Efficiency Measures ◽  
Multi Temporal

Lithuanian family farms are subject to both production and investment support under the Common Agricultural Policy. As a result, there have been structural changes in the sector. Therefore, it is important to analyse farm performance from an adjustment cost perspective. The dynamic efficiency measures encompass multi-temporal cost minimisation. This paper addresses the following problem: what are the key trends in dynamic efficiency and what are the implications thereof on further development of cereal farming in Lithuania? The present paper aims to identify the prospective paths for development of Lithuanian cereal farms by analysing their dynamic efficiency. Data Envelopment Analysis is applied to calculate technical efficiency scores under different assumptions regarding returns to scale. The results indicate pure technical inefficiency remained as the main source of the overall technical inefficiency with scale inefficiency increasing throughout 2004–2014. A more detailed analysis showed that it was smaller farms that suffered from losses in the pure technical efficiency to the highest extent. The exit of the smaller cereal and oilseed farms, therefore, has likely contributed to the decreasing technical inefficiency, yet it has dampened scale efficiency.

scholarly journals The Extent, Dynamics, and Potential Predictors of Technical Efficiency and Capacity Utilisation in Small-Scale Fisheries in Oman

2021 ◽  
Vol 34 (1) ◽  
Author(s):  
MOHAMMED AL-SIYABI ◽  
SHEKAR BOSE ◽  
HUSSEIN AL-MASROORI
Keyword(s):  
Technical Efficiency ◽  
Returns To Scale ◽  
Policy Implications ◽  
Scale Efficiency ◽  
Small Scale ◽  
Two Stage ◽  
Capacity Utilisation ◽  
Explanatory Variables ◽  
Small Scale Fisheries ◽  
Constant Returns To Scale

This paper investigates the extent, dynamics, and factors influencing technical efficiency (TE) and capacity utilisation (CU) in small-scale fisheries (SSF) using a two-stage data envelopment analysis (DEA) approach covering the period 2010–2012. A considerable extent of boat-level technical inefficiency, capacity underutilisation and scale inefficiency were evident. On average, TE and CU levels under the constant returns to scale (CRS) and variable returns to scale (VRS) models declined over time. The TE and CU scores of 2010 remained unaltered with the addition of ‘fishing time’ as an input to the model. The proportion of boats with unitary scale efficiency (SE) decreased from 26 % in 2010 to 12 % in 2012. The underutilisation rates of the inputs ‘crew’ and ‘fishing time’ ranged from 15.5 % to 31.6 % and 15.8 % to 28.6 %, respectively. Among the species category, the extent of excess capacity was 70 % to 156 % and 47 % to 119 % under the CRS and VRS models, respectively. The second-stage DEA results indicated that the explanatory variables ‘fishing location’, ‘catch per unit of effort’ (CPUE), ‘fuel costs’ and ‘crew share’ significantly influenced CU under the CRS model. In contrast, the significant influence of subsidies and other operating costs were noted under the VRS model. For the TE case, ‘age’, ‘education’, ‘subsidy’ and ‘CPUE’ were found to be significant under the CRS and VRS models. Other significant variables were found in the study under CRS and VRS models. Finally, the results from the descriptive and empirical analysis under the two-stage DEA model are discussed together with policy implications.

scholarly journals Efficiency and scale effect of county public hospitals in Shandong Province, China: a cross-sectional study

BMJ Open ◽  
2020 ◽  
Vol 10 (6) ◽  
pp. e035703
Author(s):  
Qian Li ◽  
Liqi Tian ◽  
Xiaolin Jing ◽  
Xianghua Chen ◽  
Jiangfeng Li ◽  
...  
Keyword(s):  
Technical Efficiency ◽  
Scale Effect ◽  
Returns To Scale ◽  
Cross Sectional Study ◽  
Shandong Province ◽  
Public Hospitals ◽  
Scale Efficiency ◽  
Sectional Study ◽  
Cross Sectional ◽  
Constant Returns To Scale

ObjectiveTo evaluate the efficiency of county public hospitals in Shandong Province following China’s new medical reform and compare the efficiency of hospitals with different bed sizes for improving efficiency.Design and settingThis was a cross-sectional study on the efficiency and size of 68 county public hospitals in China in 2017.Outcome measuresData envelopment analysis was used to calculate the efficiency scores of hospitals and to analyse the slack values of inefficient hospitals. The actual number of open beds, doctors, nurses and total expenditure were selected as inputs, and the total number of annual visits, discharges and total income were selected as outputs. The Kruskal-Wallis H test was employed to compare the efficiency of hospitals with different bed sizes. The χ2 test was used to compare the returns to scale (RTS) of hospitals with different bed sizes.ResultsTwenty (29.41%) hospitals were efficient. There were 27 hospitals with increasing returns to scale, 23 hospitals with constant returns to scale and 18 hospitals with decreasing returns to scale (DRS). The differences in technical efficiency (p=0.248, p>0.05) and pure technical efficiency (p=0.073, p>0.05) were not statistically significant. However, the differences in scale efficiency (p=0.047, p<0.05) and RTS (p<0.001) were statistically significant. Hospitals with DRS began to appear at 885 beds. All sample hospitals with more than 1100 beds were already saturated and some hospitals even had a negative scale effect.ConclusionsThe government and hospital managers should strictly control the bed size in hospitals and make hospitals resume operating in the interests of public welfare. Interventions that rationally allocate health resources and improve the efficiency of medical workers are conducive to solving redundant inputs and insufficient outputs.

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