Efficiency of Queensland Public Hospitals via Spatial Panel Stochastic Frontier Models

Bao Hoang Nguyen (), Zhichao Wang () and Valentin Zelenyuk
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Bao Hoang Nguyen: Centre for the Economics and Business of Health, The University of Queensland, Brisbane, Qld 4072, Australia
Zhichao Wang: School of Economics and Centre for Efficiency and Productivity Analysis (CEPA) at The University of Queensland, Australia

No WP102023, CEPA Working Papers Series from University of Queensland, School of Economics

Abstract: We adapt a range of mainstream spatial econometric models to the four-component error term panel stochastic frontier framework to estimate the inefficiency of public hospitals in Queensland, Australia, and to investigate different channels of spatial effects in hospital performance. Our results demonstrate a statistically significant presence of the spatial dependence from the autoregressive dependent variable and the autocorrelated error term. Additionally, we observe a positive spillover effect of input factors, as well as some impacts from accounting for the spatial dependence on the inefficiency estimation. Specifically, the resulting inefficiency estimates from the spatial models turned out to be higher than those from the non-spatial model, yet the magnitude of difference is relatively modest, confirming the approximate validity of the non-spatial stochastic frontier approach for this data set.

Keywords: RStochastic frontier analysis; spatial model; inefficiency; hospital (search for similar items in EconPapers)
JEL-codes: C24 C61 I11 I18 (search for similar items in EconPapers)
Date: 2023-12
New Economics Papers: this item is included in nep-eff and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:qld:uqcepa:192

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