Non-parametric Approaches to Education and Health Expenditure Efficiency in OECD Countries

Antonio Afonso and Miguel St. Aubyn ()

No 2004/01, Working Papers from Department of Economics at the School of Economics and Management (ISEG), Technical University of Lisbon.

Abstract: We address the efficiency of expenditure in education and health sectors for a sample of OECD countries by applying two alternative non-parametric methodologies: FDH and DEA. Those are two areas where public expenditure is of great importance so that findings have strong implications in what concerns public sector efficiency. When estimating the efficiency frontier we use both measures of expenditure and quantity inputs. We believe this approach to be advantageous since a country may well be efficient from a technical point of view but appear as inefficient if the inputs it uses are expensive. Efficient outcomes across sectors and analytical methods seem to cluster around a small number of core countries, even if for different reasons: Finland, Japan, Korea and Sweden.

Keywords: expenditure and education; expenditure and health; expenditure efficiency; production possibility frontier; FDH; DEA (search for similar items in EconPapers)
JEL-codes: I18 I21 I28 H51 H52 C14 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-edu, nep-eec, nep-hea and nep-pbe
Date: 2004
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