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A non-parametric approach to identifying the sources of cost savings arising from competitive tendering

McMaster, R. (1996) A non-parametric approach to identifying the sources of cost savings arising from competitive tendering. Applied Economics Letters, 3 (7). pp. 463-466. ISSN 1350-4851 (doi:10.1080/758540807)

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Publisher's URL: http://dx.doi.org/10.1080/758540807

Abstract

The estimation of the factors contributing to the reduction in the costs of service delivery arising from the tendering of specified health and local authority activities presents difficulties for conventional parametric techniques, because of an absence in cardinal measurability. This implies that the debate over whether reductions in costs are primarily due to improvements in productivity or deteriorations in the conditions of incumbent workforces remains highly polemic. Attempts are made to measure the principal sources of cost savings using a non-parametric procedure. In this way a more generalized picture may be presented than has been the case to date. It is found that productivity improvements are the highest ranked source of cost reductions, but reductions in employee conditions and earnings are also highly ranked. It is emphasized that those sources are not independent, and that more research into the primary contributors to increases in productivity is needed.

Item Type:Article
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:McMaster, Prof Robert
Authors: McMaster, R.
College/School:College of Social Sciences > Adam Smith Business School > Management
Journal Name:Applied Economics Letters
ISSN:1350-4851
ISSN (Online):1466-4291
Published Online:2 November 2006

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