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KBS Spring Research Seminar - 4th April 2018

Title: A Comparison of Two-Stage Semi-Parametric Methods in Determining Nursing Home Technical Efficiency
Presenter: Shiovan Ní Luasa
Time:  12:00 - 13:00
Venue:  KB1-15 

The title and abstract of Shiovan’s presentation are: 
 
A Comparison of Two-Stage Semi-Parametric Methods in Determining Nursing Home Technical Efficiency
This paper explores various two-stage semi-parametric methods to determine nursing home technical efficiency. It uses a very rich primary data set comprised of 59 public and 93 private Irish nursing homes for the period 2008-2009.  Technical efficiency (TE) scores in the health sector literature are often estimated using either a non-parametric conventional Data Envelopment Analysis (DEA) or the fully parametric Stochastic Frontier Analysis (SFA) approach.  While the SFA technique accounts for noise in the data and also allows for an unbiased estimation of the factors affecting efficiency, this method requires specification of the functional form of a production or cost function.  On the other hand, DEA does not impose these restrictions.  However, the estimation of the efficiency determinants using the conventional DEA scores in the second stage may lead to biased estimates of both the TE scores and the efficiency determining variables.  This paper tries to fill the gap between the conventional DEA and SFA approaches and applies alternative semi-parametric methods.  The methods considered do not impose any functional form restrictions on the data, and they also account for random sampling variability and reduce the bias in both the estimated TE scores and the estimated efficiency determinants.  In this paper, we model TE in terms of an input distance function which allows us to estimate input-oriented technical efficiencies by investigating how much the input vector can be proportionally reduced while holding the output vector fixed.  Output is measured as total patient days, while inputs are measured as medical staff, non-medical staff and the number of beds in nursing home units. Furthermore, we use several efficiency determining variables which are divided into objective quality characteristics and conventional determinants such as size, ownership, location, chain, case mix and the age of the nursing homes.  Additionally, we split the sample into different groups: private and public nursing homes; chain and non-chain private nursing homes; and nursing homes located in rural and urban areas.  We find notable differences in the results between the conventional DEA and the semi-parametric methods. We also derive some conclusive findings with respect to the estimated TE scores and the efficiency determining variables for the nursing home sector in Ireland.
 
The seminar takes place at the slightly earlier than usual time of 12 noon, Wednesday 4th, in KB1-15