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Does neighbour’s grass matter? Exploring spatial dependent heterogeneity in technical efficiency of Italian hospitals

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  • Cavalieri, M.; Di Caro, P.; Guccio, C.; Lisi, D.;

Abstract

With respect to the other dimensions of hospital behaviour, studying the presence of interaction effects on efficiency involves the issue of which approach is most appropriate to incorporate the spatial dependence in the empirical efficiency model. Using a large sample of Italian hospitals, this paper explores the presence of spatial dependence in technical efficiency. To this purpose, we employ a Spatial Stochastic Frontier Analysis (SSFA) that allows us to robustly estimate the efficiency of each hospital while considering the presence of spatial dependence. Furthermore, we employ both standard spatial contiguity matrix and spatial matrixes exploring the idea of institutional contiguity. Overall, the results suggest an insignificant role for spatial dependence in the efficiency of Italian hospitals, regardless of the specific form of spatial dependence implicit in the weights matrix.

Suggested Citation

  • Cavalieri, M.; Di Caro, P.; Guccio, C.; Lisi, D.;, 2017. "Does neighbour’s grass matter? Exploring spatial dependent heterogeneity in technical efficiency of Italian hospitals," Health, Econometrics and Data Group (HEDG) Working Papers 17/13, HEDG, c/o Department of Economics, University of York.
    • Handle: RePEc:yor:hectdg:17/13
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    1. Hung-jen Wang & Peter Schmidt, 2002. "One-Step and Two-Step Estimation of the Effects of Exogenous Variables on Technical Efficiency Levels," Journal of Productivity Analysis, Springer, vol. 18(2), pages 129-144, September.
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    6. Atella, Vincenzo & Belotti, Federico & Depalo, Domenico & Piano Mortari, Andrea, 2014. "Measuring spatial effects in the presence of institutional constraints: The case of Italian Local Health Authority expenditure," Regional Science and Urban Economics, Elsevier, vol. 49(C), pages 232-241.
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    More about this item

    Keywords

    technical efficiency; hospitals; spatial dependence; SSFA;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis

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