Efficiency in the generation of social welfare in Mexico: A proposal in the presence of bad outputs

Abstract

One of the main goals of any country is to secure the general welfare of society, entailing positive levels of education, health and income, coupled with low levels of social inequality. The following paper studies the efficient use of economic and social resources to generate social welfare in the presence of bad outputs in the states of Mexico during 2010. A two-level data envelopment analysis model was used to determine how efficient the 32 states of the Mexican Republic were, considering as model variables the socioeconomic indicators of the three dimensions of human development (education, health and income), and the data on poverty or inequity in the country. The analysis of the results reveals that only 5 of the 32 units studied were efficient in generating welfare and in reducing poverty, while the rest need to increase their welfare levels and especially reduce inequity in education and income using the economic and social resources they possess.