Measuring the Efficiency of Residential Real Estate Brokerage Firms

Randy I. Anderson (), Robert Fok (), Leonard V. Zumpano () and Harold W. Elder ()
Additional contact information
Randy I. Anderson: Department of Economics and Finance Northeast Louisiana University Monroe, Louisiana 71209-0130, http://ele.ulm.edu/e&f.htm
Robert Fok: National Chung Cheng University Taiwan
Leonard V. Zumpano: Department of Economics, Finance and Legal Studies Tuscaloosa, Alabama 35487-0200, http://www.cba.ua.edu/econ_fin.html
Harold W. Elder: University of Georgia Athens, Georgia 30602, http://www.cba.ua.edu/econ_fin.html

Journal of Real Estate Research, 1998, vol. 16, issue 2, 139-158

Abstract: This article measures overall, allocative, technical, pure technical and scale efficiency levels for a sample of residential real estate brokerage firms using data envelopment analysis, a linear-programming technique. The results suggest that real estate brokerage firms operate inefficiently. Inefficiencies are primarily a function of sub-optimal input allocations and the failure to operate at constant returns to scale rather than from poor input utilization. Regression analysis is employed to determine which firm and/or market characteristics affect efficiency levels. The results show that increasing firm size increases efficiency while choosing to franchise, adding an additional multiple listing service and increasing operating leverage decreases firm performance.

JEL-codes: L85 (search for similar items in EconPapers)
Date: 1998
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Citations: View citations in EconPapers (21)

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