Efficiency Evaluation of Functioning of Socio-Economic Systems Based on Production Functions: New Approach

Abstract

The aim of the article is to substantiate the possibility of using the performance indicator designed according to the author’s methodology along with other indicators characterizing functioning of socio-economic systems. The performance indicator is defined as the ratio of normalized and standardized actual results to expected values which are calculated by the model of the relationship of effective signs and state and impact factors. The model is a production function, whose parameters can be defined by factor analysis of dependencies. To substantiate the presented indicator the author carries out a comparative analysis of its statistical dependence with the indicators of technical efficiency calculated using the stochastic boundary method. The paper considers 12 different variants which differ in the type of distributing the random component, which characterizes the inefficiency of the system; methods of calculating technical efficiency, as well as the presentation of data (pooled and panel data). As a basic model, the power multiplicative model in the form of Cobb-Douglas is used, which includes the volume of gross regional product, the cost of fixed assets, the average annual number of employees in economy and the cost of technological innovation taking into account inflation. The information base of the research is data on regions of the Central Federal district for 2007–2016. For the considered variants the relationships between the proposed performance indicator and other indicators considered were statistically significant, which gives reason to use it as a private indicator for analyzing functioning of socio-economic systems. The performance indicator can be used as a tool to analyze and compare functioning of socio-economic systems operating in different conditions.