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Estimating the technical efficiency of health care systems: A cross-country comparison using the directional distance function

Gang Cheng and Panagiotis Zervopoulos ()

European Journal of Operational Research, 2014, vol. 238, issue 3, 899-910

Abstract: Economic activity produces not only desirable outputs but also undesirable outputs. Undesirable outputs are usually omitted from efficiency assessments (i.e., applications of Data Envelopment Analysis) which fail to express the true production process. The directional distance function model has been used for handling asymmetrically both desirable and undesirable outputs in the assessment process. In the present paper, we apply a generalized directional distance function to measure the efficiency of the health systems of 171 countries. We incorporate both desirable and undesirable outputs into the efficiency assessment without transforming the latter type of outputs into inputs or into their inverse form, as is done in most of the extant studies that deal with the measurement of health efficiency. The methodology that we apply introduces a modified definition of the efficiency score which yields results consistent with those obtained from radial DEA models. In addition, our results are independent of the length of the direction vector.

Keywords: OR in health services; Data envelopment analysis; Directional distance function; Undesirable outputs; Health systems (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1016/j.ejor.2014.05.007

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European Journal of Operational Research is currently edited by Roman Slowinski, Jesus Artalejo, Jean-Charles. Billaut, Robert Dyson and Lorenzo Peccati

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Handle: RePEc:eee:ejores:v:238:y:2014:i:3:p:899-910