The purpose of this study is to investigate cost function and to estimate inefficiency level of community multi-service centers in Seoul Metropolitan City. This study may contribute to present policy implications improving efficiency of the centers.
The researcher used the data regarding cost and outputs of the 78 centers. This data were collected during the annual city-wide evaluation. It was analyzed it by using the stochastic frontier cost regression model, which is a technique allowing to estimate the extent of inefficiency for both individual organization and whole industry level.
Major findings are as followed:
first, the average cost-inefficiency level was 27% of the total costs:
second, there was no difference in inefficiency by size, location, or management quality level: and.
third, the estimated inefficiency was appeared to have positive relationship with government subsidies, expenditure for free-charge service, and expenditure for personnel.
The study, however, failed to reveal factors influencing the estimated inefficiency. A major reason would be the lack of information about management styles. Because, a large part of inefficiency will be related to management.
Finally, this study will be meaningful in presenting a cost function and the estimated inefficiency in the area of social service. It will make contribution to evaluation of policy intervention regarding social service.
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