This paper analyses the efficiency of Spanish local governments using non-convex frontier methods. More specifically, it analyses the total cost inefficiency and proposes its decomposition into three additive components: short-term variable cost inefficiency; capacity utilisation of fixed inputs; and scale inefficiency. The second and third components correspond to the long-term cost efficiency notion. The proposition is applied to a sample of Spanish municipal councils (municipalities with over 2,000 inhabitants located in Catalonia, the Spanish north-eastern region). The results confirm the existence of significant cost inefficiency coefficients related to both the long and short term.
Authors
Victor M. Gimenez
Diego Prior
Journal article details
- DOI
- 10.1111/j.1475-5890.2007.00050.x
- ISSN
- Print: 0143-5671 Online: 1475-5890
- JEL
- D24, D60, H71, H72
- Issue
- March 2007
Suggested citation
Gimenez, V and Prior, D. (2007). 'Long- and short-term cost efficiency frontier evaluation: evidence from Spanish local governments' (2007)
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