Economic Efficiency and Benchmarking

Course content

Assessing the efficiency of resource utilisation is important, as this is the first step in subsequently improving the performance. This is relevant in both in the private sector, due to the intensity of competition, and also in the public sector, where budget cuts and demands for efficiency are common.

This course covers specific benchmarking methods that are very useful in practice for evaluating the relative performance of different organisational units. Specifically, the course will focus on the non-parametric Data Envelopment Analysis (DEA) approach, and other related approaches. As well as providing measures for the extent of the (in)efficiency, DEA also identifies role model units which less efficient units can emulate, as well as performance targets at which inefficient units might aim.  Benchmarking analysis through the use of DEA thus supports the identification and adoption of operating practices conducive to the efficient utilisation of resources.

Besides covering both theoretical and practical aspects of the use of DEA, the course also looks at some real life applications, in both private and public sector organizations.

Education

MSc Programme in Agricultural Economics
MSc Programme in Environmental and Natural Resource Economics

 

Learning outcome

The primary objective of the course is to provide the students with relevant knowledge, practical skills, and competences in benchmarking analysis using non-parametric approaches like Data Envelopment Analysis.

After completing the course the student should be able to:

Knowledge:
Students are expected to be able to

  • Explain the differences between different DEA model specifications and justify the choices of specific models for a given problem context.
  • Explain the differences between the envelopment and multiplier formulations of the DEA models and their respective uses.
  • Argue for the relevance of different model extensions for specific scenarios, including but not limited to the use of weight restrictions and different projections onto the efficiency frontier.


Skills:
Students are expected to be able to

  • Calculate efficiency scores and identify the corresponding benchmarks, peers & weights in simple examples.
  • Use appropriate software  to conduct empirical benchmarking analysis
  • Interpret the results from benchmarking analysis and discuss their implications for management.



Competences:
Students are expected to be able to

  • Use non-parametric benchmarking techniques to investigate various real-life empirical issues
  • Critically evaluate the appropriateness of specific non-parametric benchmarking modelling approaches for a given practical scenario and the corepsondign results.

The course will involve combinations of lectures, small examples and exercises done in class.

Students need knowledge and competences in basic microeconomic production theory in order to successfully participate in this course. These competences can, for example, be obtained by attending the courses LOJB10259 (Mikroøkonomi) and LOJF10262 (Produktionsøkonomi).

ECTS
7,5 ECTS
Type of assessment
Oral examination, 30 min
Individual oral presentation of the report and examination. No time for preparation.
Marking scale
7-point grading scale
Censorship form
No external censorship
Flere interne bedømmere
Criteria for exam assessment

To receive a mark of 12 the student have to show complete fulfillment of the learning outcomes.

Single subject courses (day)

  • Category
  • Hours
  • Lectures
  • 32
  • Exercises
  • 28
  • Project work
  • 60
  • Course Preparation
  • 75
  • Exam
  • 1
  • Exam Preparation
  • 10
  • English
  • 206