An Empirical Comparison of DEA and SFA Method to Measure Hospital Units’ Efficiency

George Katharakis, Maria Katharaki, Theofanis Katostaras


Although frontier techniques have been used to measure healthcare efficiency, their utility in decision making process is limited by both methodological questions concerning their application. The present paper aims to examine the data envelopment analysis (DEA) and stochastic frontier analysis (SFA) results in order to facilitate a common understanding about the adequacy of these methods. A two-stage bootstrap DEA method and the Translog formula of the SFA were performed. Multi-inputs and multi-outputs were used in both of the approaches assuming two scenarios either including environmental variables or not. Thirty-two Greek public hospital units constitute the sample. The main output of the analysis was that the efficiency scores increased with the incorporation of environmental variables. Moreover, environmental variables being hospital status and geographical position were found significantly correlating with inefficiency, while patient mobility was not found strongly correlating. DEA and SFA were found to yield divergent efficiency estimates due to the nature of the environmental variables and the measurement error. The analysis concludes that there is a need for careful attention by stakeholders since the nature of the data and its availability influence the measurement of the efficiency and thus it is necessary to be specific when choosing the mathematical form.


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Paper Citation

in Harvard Style

Katharakis G., Katharaki M. and Katostaras T. (2013). An Empirical Comparison of DEA and SFA Method to Measure Hospital Units’ Efficiency . In Proceedings of the 2nd International Conference on Operations Research and Enterprise Systems - Volume 1: ICORES, ISBN 978-989-8565-40-2, pages 242-251. DOI: 10.5220/0004274502420251

in Bibtex Style

author={George Katharakis and Maria Katharaki and Theofanis Katostaras},
title={An Empirical Comparison of DEA and SFA Method to Measure Hospital Units’ Efficiency},
booktitle={Proceedings of the 2nd International Conference on Operations Research and Enterprise Systems - Volume 1: ICORES,},

in EndNote Style

JO - Proceedings of the 2nd International Conference on Operations Research and Enterprise Systems - Volume 1: ICORES,
TI - An Empirical Comparison of DEA and SFA Method to Measure Hospital Units’ Efficiency
SN - 978-989-8565-40-2
AU - Katharakis G.
AU - Katharaki M.
AU - Katostaras T.
PY - 2013
SP - 242
EP - 251
DO - 10.5220/0004274502420251