This paper proposes an iterative process for determining what we define as a “reasonable frontier efficiency,” a concept that establishes future targets according to their current level of performance. Our “reasonable frontier” has the following properties: (1) it is underpinned on the efficiency framework, (2) it detects the presence of outliers and proposes a procedure to establish the influence introduced by extreme observations, and (3) it sorts out the problem of data masking. The proposed method is applied to a sample of Spanish hospitals. The results obtained confirm the applicability of the proposal made.
AgrellP. J.BogetoftP.TindJ.2002. “Incentive Plans for Productive Efficiency, Innovation and Learning.”International Journal of Production Economics78: 1–11.
2.
AndersenP.PetersenN. C.1993. “A Procedure for Ranking Efficient Units in Data Envelopment Analysis.”Management Science39: 1261–1264.
3.
BankerR. D.1993. “Maximum Likelihood, Consistency and Data Envelopment Analysis: A Statistical Foundation.”Management Science39: 1265–1273.
4.
BankerR. D.ThrallR. M.1992. “Estimation of Returns to Scale Using Data Envelopment Analysis.”European Journal of Operational Research62: 74–84.
5.
BogetoftP.1994. “Incentive Efficient Production Frontiers: An Agency Perspective on DEA.”Management Science40: 959–968.
6.
ChilingerianJ. A.ShermanH. D.1990. “Managing Physician Efficiency and Effectiveness in Providing Hospital Services.”Health Services Management Research3: 3–15.
7.
DusanskyR.WilsonP. W.1994. “Technical Efficiency in the Decentralized Care of the Developmentally Disabled.”Review of Economics and Statistics76: 340–345.
8.
DusanskyR.WilsonP. W.1995. “On the Relative Efficiency of Alternative Methods of Producing Public Sector Output: The Case of Developmentally Disabled.”European Journal of Operational Research80: 608–628.
9.
EzzamelM.Mar-MolineroC.1990. “The Distributional Properties of Financial Ratios in UK Manufacturing Companies.”Journal of Business Finance and Accounting17: 1–30.
10.
FoxK. J.HillR. J.DiewertW. E.2004. “Identifying Outliers in Multi-Output Models.”Journal of Productivity Analysis22: 73–94.
11.
KittelsenS. A. C.1993. Stepwise DEA: Choosing Variables for Measuring Technical Efficiency in Norwegian Electricity Distribution.Oslo: University of Oslo, Department of Economics.
12.
MurrayR.1992. “Measuring Public-Sector Output: The Swedish Report.” In Output Measurement in the Service Sectors, edited by GrilichesZvi, 517–542. National Bureau of Economic Research, University of Chicago Press.
13.
PastorJ. T.RuizJ. L.SirventI.1999. “A Statistical Test for Detecting Influential Observations in DEA.”European Journal of Operational Research115: 542–554.
14.
TimmerC. P.1971. “Using a Probabilistic Frontier Production Function to Measure Technical Efficiency.”Journal of Political Economy79: 776–794.
15.
ValdmanisV.1992. “Sensitivity Analysis for DEA models: An Empirical Example Using Public vs. NFP Hospitals.”Journal of Public Economics49: 185–205.
16.
WilsonP. W.1995. “Detecting Influential Observations in Data Envelopment Analysis.”Journal of Productivity Analysis6: 27–45.
17.
WilsonP. W.JadlowJ. M.1982. “Competition, Profit Incentives, and Technical Efficiency in the Provision of Nuclear Medicine Services.”Bell Journal of Economics13: 472–482.
18.
WorthingtonA. C.2004. “Frontier Efficiency Measurement in Health Care: A Review of Empirical Techniques and Selected Applications.”Medical Care Research and Review61: 135–170.
19.
ZweifelP.BreyerF.KifmannM.2009. Health Economics, 2nd ed.Berlin: Springer-Verlag.
