Andrew C. Worthington

Frontier Efficiency Measurement in Health Care: A Review of Empirical Techniques and Selected Applications:

Health care institutions worldwide are increasingly the subject of analyses aimed at defining, measuring, and improving organizational efficiency. However, despite the importance of efficiency measurement in health care services, it is only relatively recently that the more advanced econometric and mathematical programming frontier techniques have been applied to hospitals, nursing homes, health management organizations, and physician practices, among others. This article provides a synoptic survey of the comparatively few empirical analyses of frontier efficiency measurement in health care services. Both the measurement of efficiency in a range of health care services and the posited determinants of health care efficiency are examined.

Gold investment as an inflationary hedge: cointegration evidence with allowance for endogenous structural breaks

This note tests for the presence of a stable long-run relationship between the price of gold and inflation in the United States from 1945 to 2006 and from 1973 to 2006. Since both the gold market and the inflationary regime have been subjected to structural change over time, a novel unit root testing procedure is employed which allows for the timing of significant breaks to be estimated, rather than assumed exogenous. After taking these breaks into account, a modified cointegration approach provides strong evidence of a cointegrating relationship between gold and inflation in the post-war period and since the early 1970s. The results lend support to the widely held view that direct and indirect gold investment can serve as an effective inflationary hedge.

An Empirical Survey of Individual Consumer, Business Firm and Financial Institution Attitudes towards Islamic Methods of Finance

Purpose - The purpose of this paper is to review the attitudes, perceptions and knowledge of Islamic financial products and services. Design/methodology/approach - A synoptic survey of empirical analyses about Islamic financial products and services and comparison with the literature on conventional financial services and products. Findings - It was found that while religious conviction is a key factor in the use of Islamic finance, consumers also identify bank reputation, service quality and pricing as being of relevance. When selecting a financial institutions products and services, business firms usually employ criteria that are more conventional, such as the cost of finance, in their decision making. There is also interest among financial institutions in supplying Islamic financial products and services, but this is mitigated by complications with firm management and a lack of familiarity with business conditions. The concept of risk sharing with borrowers serves as a substantial barrier to most financial institutions engaging in Islamic methods of finance. Practical implications - Need for further theoretical and empirical research on how religious convictions affect consumers in their financial decision making. In addition, most work on Islamic finance is in a single national context, international comparisons are required. Originality/value - This paper is the only known empirical survey of attitudes, perceptions and knowledge of Islamic financial products and services. It provides guidance for future research in Islamic finance and serves as an aid for decision making by policymakers, consumer interest groups, business firms and financial institutions.

Australian Evidence Concerning the Information Content of Economic Value-Added

Pooled time-series, cross-sectional data on 110 Australian companies over the period 1992–1998 is employed to examine whether the trademarked variant of residual income known as economic value-added (EVA®) is more highly associated with stock returns than other commonly-used accounting-based measures. These other measures of internal and external performance include earnings, net cash flow and residual income. Three alternative formulations for pooling data are also employed in the analysis, namely, the common-effects, fixed-effects and random-effects models, with the fixed-effects approach found to be the most empirically appropriate. Relative information content tests reveal returns to be more closely associated with EVA® than residual income, earnings and net cash flow, respectively. An analysis of the components of EVA® confirms that the GAAP-related adjustments most closely associated with EVA® are significant at the margin in explaining stock returns.

Malmquist indices of productivity change in Australian financial services

In this study the nature and extent of efficiency and productivity growth in deposit-taking institutions is investigated using nonparametric frontier techniques. Employing Malmquist indices, productivity growth is decomposed into technical efficiency change and technological change for two hundred and sixty-nine Australian credit unions. The results indicate that most credit unions experienced technological progress after deregulation, and that any efficiency gain found was largely the result of improvements in technical efficiency rather than scale efficiency. That productivity growth which did occur due to an increase in efficiency over the period tended to be in credit unions with a small number of members and a large asset base, whilst technical progress was most pronounced in institutions with a relatively high proportion of residential and commercial loans.

Performance Indicators and Efficiency Measurement in Public Libraries

A sample of one hundred and sixty-eight New South Wales local government libraries is used to analyse the efficiency measures derived from the non-parametric technique of data envelopment analysis. Depending upon the assumptions employed, 9.5 percent of local governments were judged to be overall technically efficient in the provision of library services, 47.6 percent as pure technically efficient, and 10.1 percent as scale efficient. The study also analyses the posited linkages between comparative performance indicators, productive performance and nondiscretionary environmental factors under these different model formulations. The results indicate that the presence of exogenous factors and scale effects account for a major portion of the differences in observed efficiency between different groups of local governments.

Measuring the impact of natural disasters on capital markets: an empirical application using intervention analysis

The impact of natural disasters on the Australian equity market is examined. The data set employed consists of daily price and accumulation returns over the period 31 December 1982–1 January 2002 for the All Ordinaries Index (AOI) and a record of 42 severe storms, floods, cyclones, earthquakes and bushfires (wildfires) during this period with an insured loss in excess of A

An empirical survey of frontier efficiency measurement techniques in local government

5 mil. and/or total loss in excess of A

Incorporating contextual information in public sector efficiency analyses: a comparative study of NSW local government

100 mil. Autoregressive moving average (ARMA) models are used to model the returns and the inclusion of news arrival, in the form of the natural disasters, is specified using intervention analysis. The results indicate that bushfires, cyclones and earthquakes have a major effect on market returns, unlike severe storms and floods. The net effects can be positive and/or negative with most effects being felt on the day of the event and with some adjustment in the days that follow.

The determinants of non-bank financial institution efficiency: a stochastic cost frontier approach

Local government in advanced economies is undergoing a period of rapid reform aimed at enhancing its efficiency and effectiveness. Accordingly, the definition, measurement and improvement of organisational performance is crucial. Despite the importance of efficiency measurement in local government it is only relatively recently that econometric and mathematical frontier techniques have been applied to local public services. This paper attempts to provide a synoptic survey of the comparatively few empirical analyses of efficiency measurement in local government. We examine both the measurement of inefficiency in local public services and the determinants of local public sector efficiency. The implications of efficiency measurement for practitioners in local government are examined by way of conclusion.