Abstract:
Stochastic frontier analysis was used to estimate the technical efficiency of specialist surgeon
practices based in Gauteng Province, South Africa. The analysis was conducted for both single and
multiple output production functions, while efficiency was allowed to depend upon surgeon and
practice characteristics.Multiple output models, due to an increase in the number of observations,
can be more precisely estimated and, as there are multiple observations per surgeon, can be
estimated with fixed effects. The results of the analyses suggest that efficiency averages around 50%
for this sample and is convex in years of surgical experience. The benefit of multiple output analysis
– improved precision – obtains, while surgeon-level fixed effects alleviate some concerns related to
unobserved heterogeneity.
