Search

This study uses quarterly longitudinal data to examine the cost efficiency of 20 New Zealand District Health Boards between 2011 and 2018. A random-effects dynamic stochastic frontier model is applied to estimate the persistence of Health Boards' cost efficiency while considering both observed and unobserved heterogeneity. The findings reveal that New Zealand Health Boards, on average, spent approximately 7.5% more than the estimated costs of efficient operation, primarily due to high persistence in cost inefficiency. Notably, Health Boards serving rural areas faced even higher levels of long-run cost inefficiency, resulting in an overspending of about 15% of annual budgets. The results of this study highlight that most Health Boards demonstrated excellent short-term performance relative to the long-run equilibrium level of cost inefficiency. However, the more significant concern lies in high long-run cost inefficiency within the sector attributed to structural and regulatory issues. Policymakers are urged to address these underlying problems to improve overall cost efficiency in the health sector. [ABSTRACT FROM AUTHOR]

Using the longitudinal data on New Zealand District Health Boards (DHBs) for the period 2011-2018, the total factor productivity (TFP) change and its components are evaluated using an input distance function and a cost function. The empirical results indicate that TFP decreased at an average rate of between 0.73 and 0.98 per cent annually, mainly due to the deterioration of the technological component, which averaged close to −2 per cent between 2011 and 2018. However, contrary to the technological component, the scale component improved every year at an average rate of 1–1.16 per cent, thus cushioning some of the effects of the deteriorating technological component of the TFP. The TFP also posted a one-off positive growth in 2016, following the nationwide implementation of an 'elective initiative' programme in the 2015–2016 year, which raised both the scale and efficiency (technical and cost) components to their highest levels. Furthermore, the study also demonstrates the consistency in the effect of scale and technological change components on the TFP under both primal and dual approaches. [ABSTRACT FROM AUTHOR]

• Stochastic volatility as unobserved random process in stochastic frontier analysis. • The average efficiency score of 0.869 suggests a 15.1 % input reduction potential. • Shipping containers is most efficient whereas trading is least efficient. • Consumer goods and plastic products have the most consistent efficiency. • Electronics and pharmaceuticals face the most erratic efficiency. This study explores the complex relationship between firm efficiency and stochastic volatility, focusing on how firms utilise inputs to generate sales and the impact of financial shocks on efficiency levels. Utilising a dataset of 476 U.S. firms across 23 sectors from 2010 to 2022, it integrates stochastic volatility into efficiency analysis, treating volatility as an evolving, unobserved process diverging from traditional methods. The research classifies sectors into various efficiency performance categories based on their response to economic fluctuations. Findings show divergent patterns across sectors, with some exhibiting consistent efficiency and others facing erratic performance due to market and technological changes. This analysis provides valuable insights into sectoral adaptability and resilience in fluctuating economic conditions, offering strategic implications for managers and policymakers. [ABSTRACT FROM AUTHOR]