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 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 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 Cost efficiency of the Czech and Slovak banking sectors: an application of the data envelopment analysis

2016 ◽  
Author(s):  
Iveta Palecková
Keyword(s):  
Data Envelopment Analysis ◽  
Cost Efficiency ◽  
Commercial Banks ◽  
Banking Sector ◽  
Banking Industry ◽  
Returns To Scale ◽  
Data Envelopment ◽  
Cost Efficient ◽  
The Cost ◽  
Variable Returns To Scale

The aim of the paper is to estimate the cost efficiency of the Czech and Slovak commercial banks within the period 2010-2014. For empirical analysis the Data Envelopment Analysis input-oriented model with variable returns to scale is applied on the data of the commercial banks. The intermediation approach is adopted to define the inputs and outputs. The Czech commercial banks are more cost efficient than Slovak commercial banks. The development of average cost efficiency is similar in the Czech and Slovak banking industry. The most efficient Czech banks are Ceská sporitelna and Sberbank in the Czech banking sector, the most efficient Slovak bank is Privatbanka with 100% efficiency.

scholarly journals Does Access to Modern Marketing Channels Improve Dairy Enterprises’ Efficiency? A Case Study of Punjab, Pakistan

1998 ◽  
Vol 17 (1) ◽  
pp. 63-82
Author(s):  
Sana Sadaf ◽  
Khalid Riaz
Keyword(s):  
Returns To Scale ◽  
Marketing Channels ◽  
Scale Efficiency ◽  
Data Envelopment ◽  
Land Area ◽  
Fresh Milk ◽  
The Mean ◽  
Using Data ◽  
Variable Returns To Scale

The main objective of this study is to investigate how access to modern marketing channels impacts the efficiency of dairy enterprises. Using data on dairy farms in central Punjab (Sargodha), we carry out a nonparametric data envelopment analysis to measure their technical and scale efficiencies. The results show that, for the sample dairy enterprises, the mean technical efficiency under variable returns to scale was 0.89 while scale efficiency was 0.94. The results of a follow-on regression analysis support the hypothesis that the access to modern marketing channels, where payment for fresh milk is based on measured milk quality (fat content), improved efficiency. We find that efficiency is positively affected by the size of dairy operations, and negatively by the size of operational land area. Moreover, dairy enterprises with smaller herds tend to operate at a suboptimal scale, possibly due to credit and/or land constraints.

scholarly journals Evaluating Efficiency of Waqf Institutions: An Intermediation Approach Using Data Envelopment Analysis (DEA)

2019 ◽  
Vol 2 (2) ◽  
pp. 82-89
Author(s):  
Nor Tasik Misbahrudin
Keyword(s):  
Data Envelopment Analysis ◽  
Technical Efficiency ◽  
Wealth Distribution ◽  
Scale Efficiency ◽  
Optimum Level ◽  
Data Envelopment ◽  
Input And Output ◽  
Distribution State ◽  
Using Data ◽  
Decision Making Units

Waqf is a voluntary charity that cannot be disposed of and the ownership cannot be transferred once it is declared as waqf assets. Waqf institutions play an important role in helping the development of Muslims ummah through wealth distribution. State Islamic Religious Councils (SIRCs) in Malaysia are the sole trustee that manage and develop waqf assets. Based on selected input and output, the intermediary approach assumes that cash waqf received as output while total expenditure of SIRCs as input. Under this approach SIRCs act as intermediary between waqif (giver) and beneficiaries. Thus, this paper attempts to analyze the efficiency of waqf institutions in Malaysia by using Data Envelopment Analysis (DEA) method under output-orientation using Variable Return to Scale (VRS) assumptions. Four SIRCs were selected as decision making units (DMU) for the period of 2011 to 2015. The result indicates that changes in average technical efficiency for every year is contributed by both pure technical and scale. However, inefficiency of Malaysian waqf institutions is mostly contributed by pure technical efficiency aspects rather than scale. 2012 showed the highest average technical efficiency with 73.9% as most of the institutions operated in optimum level of input to produce output. Thus, the result suggests that both technical and scale efficiency should be improved to achieve the most efficient and productive level of performance in order to fulfill objectives of the institutions as an intermediary between waqif and beneficiaries.

Technical Efficiency of State Road Transport Undertakings in India - Data Envelopment Analysis

2012 ◽  
Vol 1 (2) ◽  
pp. 31-42 ◽  
Author(s):  
V. Prakash ◽  
J. Rajesh ◽  
M. Thilagam
Keyword(s):  
Decision Making ◽  
Data Envelopment Analysis ◽  
Technical Efficiency ◽  
Relative Efficiency ◽  
Fuel Efficiency ◽  
Returns To Scale ◽  
Road Transport ◽  
Data Envelopment ◽  
Variable Returns To Scale ◽  
Decision Making Units

Data envelopment analysis (DEA) is a method of analyzing the relative efficiency of similar types of organizations known as decision making units (DMU’s). In this paper, DEA model is applied to evaluate the relative technical efficiency of state road transport undertakings (SRTU’s) in India during the period 2011-2012. The authors have considered thirty-four SRTU’s functioning in India. The variables chosen to characteristic production units are the number of fleet held, staff strength and fuel efficiency as inputs and Passengers carried as output. The BCC model is input- oriented allowing for variable returns to scale (VRS), units are ranked and the projection analyses are given.

scholarly journals Application of Window Malmquist Index for Examination of Efficiency Change of Czech Commercial Banks

2017 ◽  
Vol 8 (3) ◽  
pp. 173-190
Author(s):  
Iveta Palecková
Keyword(s):  
Commercial Banks ◽  
Returns To Scale ◽  
Malmquist Index ◽  
Scale Efficiency ◽  
Data Envelopment ◽  
Efficiency Change ◽  
Average Efficiency ◽  
Index Approach ◽  
Constant Returns To Scale ◽  
Variable Returns To Scale

Abstract The aim of the paper is to apply the Window Malmquist index approach to examine the efficiency change of Czech commercial banks within the period 2004-2013. We used the Data Envelopment Analysis and theWindow Malmquist index approaches to estimate the efficiency change of Czech commercial banks. The average efficiency computed under the assumption of constant returns to scale was 73% and under the assumption of variable returns to scale the value was 83%. We estimated the average positive efficiency growth of Czech commercial banks during the period 2004-2013. We found that average scale efficiency was 88%, which means that Czech commercial banks were of an inappropriate size, especially the largest banks.

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.

Measuring the financial efficiencies and performances of Turkish funds

2010 ◽  
Vol 60 (3) ◽  
pp. 295-320 ◽  
Author(s):  
F. Gökgöz
Keyword(s):  
Mutual Funds ◽  
Returns To Scale ◽  
Scale Efficiency ◽  
Portfolio Performance ◽  
Data Envelopment ◽  
Performance Indices ◽  
Programming Technique ◽  
Dea Models ◽  
Constant Returns To Scale ◽  
Variable Returns To Scale

Measuring the financial efficiencies of mutual funds in emerging markets has played an important role in finance literature. Charnes et al. (1978) advocated Data Envelopment Analysis (DEA), a valuable mathematical programming technique, which is used to measure the technical, pure and scale efficiencies of decision making units. The general form of DEA is the CCR model that depends on the assumption of constant returns to scale. Subsequently, Banker et al. (1984) developed an alternative DEA model which includes a variable returns to scale approach. The aim of this study is to measure and compare the financial efficiencies of Turkish securities and pension funds in the 2006–2007 period. In this respect, 36 securities mutual funds (SMFs) and 41 pension mutual funds (PMFs) have been evaluated comparatively according to classical portfolio performance measures and DEA models. Results from performance indices and DEA models reveal that PMFs have higher portfolio performances and financial efficiencies than SMFs in the 2006–2007 period. However, SMFs and PMFs have shown considerable increases in efficiency in the 2006–2007 period according to CCR and BCC models. Of the 77 funds studied, 23 funds in 2007 and 20 funds in 2006 demonstrated scale efficiency. Furthermore, the input ratios should be considerably improved for 2006 and 2007. But, mostly the output values of the funds were found to have remained unchanged in the case of PMFs and SMFs in 2007. The output ratios for 2006 should be considerably improved, especially in the case of SMFs. Finally, the DEA method is evaluated as a substantial quantitative tool for investors in analysing the financial efficiencies of funds in the capital markets.

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.

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