Variation In Cost Efficiency Research Articles

Predicting the spatial variation in cost-efficiency for agricultural greenhouse gas mitigation programs in the U.S.

BackgroundTwo major factors that determine the efficiency of programs designed to mitigate greenhouse gases by encouraging voluntary changes in U.S. agricultural land management are the effect of land use changes on producers’ profitability and the net sequestration those changes create. In this work, we investigate how the interaction of these factors produces spatial heterogeneity in the cost-efficiency of voluntary programs incentivizing tillage reduction and cover-cropping practices. We map county-level predicted rates of adoption for each practice with the greenhouse gas mitigation or carbon sequestration benefits expected from their use. Then, we use these bivariate maps to describe how the cost efficiency of agricultural mitigation efforts is likely to vary spatially in the United States.ResultsOur results suggest the combination of high adoption rates and large reductions in net emissions make reduced tillage programs most cost efficient in the Chesapeake Bay watershed or the Upper Mississippi and Lower Missouri sub-basins of the Mississippi River. For programs aiming to reduce net emissions by incentivizing cover-cropping, we expect cost-efficiency to be greatest in the areas near the main stem of the Mississippi River within its Middle and Lower sections.ConclusionsMany voluntary agricultural conservation programs offer the same incentives across the United States. Yet spatial variation in profitability and efficacy of conservation practices suggest that these uniform approaches are not cost-effective. Spatial targeting of voluntary agricultural conservation programs has the potential to increase the cost-efficiency of these programs due to regional heterogeneity in the profitability and greenhouse gas mitigation benefits of agricultural land management practices across the continental United States. We illustrate how predicted rates of adoption and greenhouse gas sequestration might be used to target regions where efforts to incentivize cover-cropping and reductions in tillage are most likely to be cost -effective.

Metro Station Operating Costs: An Econometric Analysis

This article develops an econometric analysis of metro station operating cost to identify factors that create variation in cost efficiency. Stations operating costs can be classified amongst the semifixed costs that a metro faces in the sense that they do not vary proportionately with metro output. They may therefore be important in determining the degree of returns to density. This article seeks to provide an improved understanding of some of the major factors driving these costs. Empirical results show that strong system-specific influences impact costs but over and above these we detect positive associations from a range of station characteristics, including the length of passageways, number of platforms, peak-level service frequency, interchange demand, and the provision of toilet facilities. In addition, we find that the presence of air-conditioning has a substantial effect in increasing expected station operating cost by as much as 40 percent.

Cost-efficiency in Medicaid long-term support services: the role of home and community based services

Growth in home and community based services (HCBS) has been implicated in rising long-term care expenditure in the Medicaid program. Its efficiency impact has not been tested. Using Stochastic Frontier Analysis (SFA) and panel data methods, we evaluated the cost efficiency of long-term support services (LTSS) provided by state Medicaid agencies and examined its association with intensity of HCBS use. We compared the efficiency of state funded HCBS programs with federal waiver programs. We found substantial variation in cost efficiency of LTSS programs by states, but all showed improvement over time related to increased HCBS use. Higher participation in federal waivers programs yielded additional improvements in cost-efficiency. Results indicate that increasing HCBS services targeted at “high need” population and developmentally disabled individuals would improve efficiency in LTSS delivery. These results reveal the importance of measuring and comparing efficiencies across Medicaid funded LTSS programs, as we introduce reforms in the LTSS delivery system. We recommend that Medicaid agencies invest in the development of improved data sources for the estimation of cost efficiencies of their programs.

Cost efficiency of university hospitals in the Nordic countries: a cross-country analysis

This paper estimates cost efficiency scores using the bootstrap bias-corrected procedure, including variables for teaching and research, for the performance of university hospitals in the Nordic countries. Previous research has shown that hospital provision of research and education interferes with patient care routines and inflates the costs of health care services, turning university hospitals into outliers in comparative productivity and efficiency analyses. The organisation of patient care, medical education and clinical research as well as available data at the university hospital level are highly similar in the Nordic countries, creating a data set of comparable decision-making units suitable for a cross-country cost efficiency analysis. The results demonstrate significant differences in university hospital cost efficiency when variables for teaching and research are entered into the analysis, both between and within the Nordic countries. The results of a second-stage analysis show that the most important explanatory variables are geographical location of the hospital and the share of discharges with a high case weight. However, a substantial amount of the variation in cost efficiency at the university hospital level remains unexplained.

Comparing hospital cost efficiency between Norway and Finland

In this study, cost efficiency in Finnish and Norwegian hospitals was compared using national discharge data and identical definitions for cost and output measures. Cross-sectional data on 47 Finnish and 51 Norwegian public hospitals in 1999 were used. Private, military and psychiatric hospitals were excluded. Data were collected from the National Discharge Registries. These were supplemented with cost information collected from hospitals’ year-end accounts. The output data included admissions grouped according to diagnosis related groups (DRGs), outpatient visits, day care and inpatient days. Net hospital operating costs excluding capital costs were used as input. Nonparametric data envelopment analysis (DEA) was used in the calculation of cost efficiency. The results revealed marked differences in efficiency, in both within country and across country comparisons. According to preliminary results there was more variation in cost efficiency among Finnish hospitals, and the average level of cost efficiency was 17–25% lower in Norwegian hospitals. Although these preliminary results must be taken with caution, this study demonstrates the importance and potential benefits of integrating cost efficiency analysis into international comparisons of health care expenditure.

Cost and productivity

We develop an analytical model capable of decomposing both intertemporal and multilateral cost variation. We begin by attributing cost variation to a price effect and a quantity effect. We then decompose the quantity effect into a productivity effect and an activity effect. The productivity effect in turn decomposes into a cost efficiency effect and, in the intertemporal context, a technical change effect. We also show how the intertemporal and multilateral cost decompositions can be implemented, using linear programming techniques. These techniques offer certain advantages over conventional econometric techniques whenever a substantial portion of cost variation is due to variation in cost efficiency. We illustrate the two cost decompositions with a pair of benchmarking exercises based on a panel of 93 US electric power generating companies, in which variation in cost efficiency does play a key role.