Estimating efficiency and its determinants in the hotel sector using a profit function

Antonio Arbelo Alvarez, Pilar Pérez-Gómez and Marta Arbelo-Pérez

Current Issues in Tourism, 2018, vol. 21, issue 8, 863-876

Abstract: Inefficiency in the hotel sector is normally estimated through cost and scale efficiencies. This paper estimates hotel profit efficiency and its determinants employing a stochastic frontier profit function and the inefficiency effects function. The key advantage of this methodology is its ability to estimate efficiency for each hotel and the factors that explain differences in efficiency in a single-stage sampling procedure. The sample consists of 231 hotels in Spain in the period 2008–2012. Empirical evidence shows that the average level of profit efficiency is 45.85% and that age, labour productivity and location are determinants of this efficiency. Policy implications for the improvement of less efficient hotels are noted.

Date: 2018
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1080/13683500.2017.1293622 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:rcitxx:v:21:y:2018:i:8:p:863-876

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/rcit20

DOI: 10.1080/13683500.2017.1293622

Access Statistics for this article

Current Issues in Tourism is currently edited by Jennifer Tunstall

More articles in Current Issues in Tourism from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().