X-Inefficiency in the Public Sector: the Case of Libraries

Donald Vitaliano

Public Finance Review, 1997, vol. 25, issue 6, 629-643

Abstract: A short-run total cost function is fitted to 1992 data for 235 public libraries in New York state. The stochastic frontier model is employed, which decomposes the error term into a random variable for statistical noise and a residual component measur ing economic inefficiency. Mean X-inefficiency (cost inefficiency) is estimated to be 24%. Government-run public libraries are about 3% more inefficient than private not-for-profit public libraries. Funding sources also influence efficiency: The greater the proportion of funds derivedfrom local taxation and from gifts, the more efficient the library.

Date: 1997
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Persistent link: https://EconPapers.repec.org/RePEc:sae:pubfin:v:25:y:1997:i:6:p:629-643

DOI: 10.1177/109114219702500604

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