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On FDH Efficiency Analysis: Some Methodological Issues and Applications to Retail Banking, Courts and Urban Transit

In: Public goods, environmental externalities and fiscal competition

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  • Henry Tulkens
Abstract
Abtract The methodology of free disposal hull (FDH) measure of productive efficiency is defined and put in perspective vis-à-vis other nonparametric techniques, in terms of the postulates on which they respectively rest. Computational issues are also considered, in relation to the linear programming techniques used in DEA. The first application bears on a comparison between a private and a public bank, in terms of the relative efficiency of their branches. Important characteristics of the data are revealed by FDH that are not by DEA, due to a better data fit. Next, efficiency estimates of judicial activities are used to evaluate what part of the existing backlog could be reduced by efficiency increases. Finally, with monthly data of an urban transit firm over 12 years, the FDH methodology is extended to a sequential treatment of time series, that supplements efficiency estimation with a measure of technical progress.

Suggested Citation

  • Henry Tulkens, 2006. "On FDH Efficiency Analysis: Some Methodological Issues and Applications to Retail Banking, Courts and Urban Transit," Springer Books, in: Parkash Chander & Jacques Drèze & C. Knox Lovell & Jack Mintz (ed.), Public goods, environmental externalities and fiscal competition, chapter 0, pages 311-342, Springer.
    • Handle: RePEc:spr:sprchp:978-0-387-25534-7_17
    DOI: 10.1007/978-0-387-25534-7_17
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