The relevance of commuting zones for regional spending efficiency

Antonio Afonso and Ana Venâncio ()

Applied Economics, 2016, vol. 48, issue 10, 865-877

Abstract: We use data envelopment analysis (DEA) efficiency scores to show that clustering municipalities into encompassing regional clusters improves spending efficiency of single stand-alone municipalities. We propose a new geographic aggregation based on municipalities-to-municipalities commuting flows, defined using hierarchical cluster analysis. Our example for Portugal shows that from an output-oriented perspective between 83% and 98% of municipalities would increase their efficiency scores, while from an input-oriented perspective between 86% and 98% of municipalities would also be better off in terms of efficiency. Then using a linear regression model, we find that population increases positively affects the efficient scores (via scale economies). Also, increases in the share of high-educated and poorer residents leads to higher efficiency scores.

Date: 2016
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Citations: View citations in EconPapers (8)

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Working Paper: The relevance of commuting zones for regional spending efficiency (2013)
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DOI: 10.1080/00036846.2015.1088145

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