Country Performance Evaluation: The DEA Model Approach

This study employs four data envelopment analysis (DEA) models to evaluate the performance efficiency of 21 OECD countries and assess whether the undesirable outputs are over-produced relative to desirable outputs. In evaluating the performance of OECD countries via super-efficiency models, this study focuses on two aspects. First, employing the concept of the Sharpe ratio, we propose another method to deal with undesirable outputs (the unemployment rate, inflation, and air pollution) in DEA. This approach can reveal the relative importance of desirable outputs and undesirable outputs, detect whether undesirable outputs are over-produced, and obtain more accurate efficiency scores. Second, we examine whether knowledge capital can improve a country’s efficiency scores. Our empirical results support the above arguments. In addition, research and development (R&D) expenditures, the proxy variable for knowledge capital, can indeed improve countries’ efficiency scores, implying that the endogenous growth theory is supported in OECD countries. Evidently, whether the undesirable outputs are included in the DEA models and are properly treated is crucial in the evaluation of efficiency values.

     

Does Unemployment Matter for Lottery Sales and their Persistence? A New Estimation Approach

This paper employs the panel smooth transition autoregressive model to evaluate the threshold effect of unemployment rate on lottery sales and their persistence. To perform the empirical estimation, we use the panel data of lottery sales in 42 US states during the period of January 2003–December 2011. Thus, we have 4536 observations. The empirical results find that the effect of unemployment on lottery sales is nonlinear, heterogeneous, and time-varying, depending on the unemployment rates in different regimes. A rise (decrease) in unemployment will lead to a higher (lower) persistence effect of lottery sales. However, reducing unemployment rate is not a practical instrument for state governments to stabilize lottery markets. For the sellers of lottery tickets, designing new lottery products is a more efficient method for stimulating current lottery sales than anticipating the improvement in the unemployment rate.     

Does Misery Index Matter for the Persistence of Health Spending? Evidence from OECD Countries

Social Indicators Research - This paper employs the panel smooth transition regression (PSTR) model to investigate the role of Okun’s misery index in the persistence of health spending in 19...     

Does Human Development Index Provide Rational Development Rankings? Evidence from Efficiency Rankings in Super Efficiency Model

The human development index (HDI) rankings have provided a referenced measure for people to choose a country in which to travel or live. This paper employs a superefficiency model to evaluate the rationality of the HDI rankings of 19 evaluated OECD countries in 2009. Compared to the HDI rankings, the efficiency rankings measured by the super-efficiency model have the following two advantages: (1) they consider the inputs that are used to generate the indicators for constructing the HDI, and decide the weights of inputs and outputs endogenously; (2) the input slacks measured by the super-efficiency model can evaluate whether the inputs are over-used and provide the improvement path of each country’s input variables. Empirical result shows that approximately 75 % of the evaluated countries had rather different results in the efficiency rankings and the HDI rankings. Additionally, the input slack shows that roughly 70 % of sample countries over-used their capital per labor relative to their existing outputs (or the HDI).