Abstract

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 pro-duction 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 more precisely estimated, and, since there are multiple observations per surgeon, can be estimated with fixed ef-fects. 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. Date: August 2011. Key words and phrases. Stochastic Frontier Analysis, Technical Efficiency. The authors would like to thank the South African Medical Association, the Foundation for Professional Development, Dr Gustav Wolvaardt, and the participating physicians for their help with this research. Any remaining errors are the sole responsibility of the authors.