Abstract: Evaluating the performance of public service providers is often complicated by the fact that they must choose input levels before demands for their services are known. We consider an even more complicated situation in which service providers have no opportunity to directly influence demands. This means that their predetermined inputs may be more than what is required to meet realised demands. In such cases, conventional measures of revenue efficiency will generally mis-classify rational and efficient managers as inefficient. We develop a more appropriate measure of revenue efficiency that accounts for exogenously-determined demands. We explain how data envelopment analysis (DEA) methods can be used to estimate our measure. The methodology is applied to hospital and health service networks in Queensland (Australia). We find that most of these networks were able to maximise the revenue they could obtain from their predetermined inputs.
Abstract: Public service managers generally make input choices in the face of uncertainty about future demands for service. This is generally not taken into account when estimating cost efficiency. In the operations research literature, for example, the standard approach to estimating cost efficiency is based on the assumption that managers choose inputs to minimise the cost of producing realised (i.e., observed) outputs. However, when outputs are unknown at the time input decisions are made, most managers will instead choose inputs to minimise the cost of producing output targets (e.g., minimum service levels, predicted maximum demands). In this paper, we explain how data envelopment analysis (DEA) estimators can be used to estimate cost, technical and allocative efficiency in these situations. The methodology is applied to Australian data on hospital and health service providers. We obtain estimates of efficiency that are quite different from estimates obtained using a standard approach that ignores uncertainty. Our work has important implications for performance evaluation and improvement programs in many public service settings.
Working paper (joint with Christopher O'Donnell).
Revise and Resubmit in Journal of Productivity Analysis.
Abstract: Public service providers generally make input decisions before the demand for their services is known. To account for demand uncertainty, it is convenient to break the decision-making process into two distinct stages: a resource planning stage in which managers choose inputs to meet expected demand, and a production stage in which the chosen inputs are used to maximise revenue and/or meet realised demand. In our previous work, we developed separate measures of how well managers performed in each stage. We then used data envelopment analysis (DEA) models to assess the performance of hospital and health service managers in Queensland (Australia). The problem with those models is that they made no allowance for measurement errors or other sources of statistical noise. In this paper, we deal with this problem using stochastic frontier analysis (SFA) models. We use Bayesian methodology to impose inequality constraints on the parameters of our models. We compare Bayesian predictions of variable cost and revenue efficiency with our earlier DEA results. We find that Bayesian predictions of variable cost efficiency exhibit less variation than estimates obtained using the DEA approach; this is likely due to the fact that the DEA model does not allow for noise, so all deviations from the estimated frontier are attributed to inefficiency. Our Bayesian predictions of revenue efficiency are qualitatively similar to those obtained using the DEA approach.
Obermann, Gabriel; Nguyen, Hoang Oanh; Nguyen, Hong Ngoc (2021). Journal of Economics and Development, 23(3), 238-253. Article Link.
Abstract:
This paper investigates the extent, the determinants and the change in the gender pay gap in Vietnam in the period 2010–2016 in order to provide suggestions for policy adjustment to narrow gender pay inequality more effectively.
This study employs the propensity score matching (PSM) method to examine inequality in pay between female and male earners sharing identical characteristics. The analysis is conducted for both the full sample and various characteristic-based subsamples. This procedure is conducted for 2010 and 2016 separately to discover the change in gap and inequality during this period.
The matching results based on the data sets taken from the Vietnam Household Living Standards Survey (VHLSS) 2010 and 2016 affirm that gender income inequality in Vietnam, though persisted, decreased significantly in 2016 compared to 2010, and was insignificant in many subsamples in 2016. In addition to the observable determinants including educational level, occupation, economic sector and industry, unobservable factors are proved to also play an important role in creating the gender pay gap in Vietnam.
The research findings suggest that policies aimed at mitigating gender pay inequality should take into account both observable characteristics and unobservable factors such as unobservable gender differences that affect wages and gender discrimination in pay.
This is the first study using a matching technique to investigate gender wage gap in Vietnam. With up-to-date data, longer research period and the superiority of the method used in dealing with sample selection bias, the results obtained are more robust, more detailed and reliable.
Nguyen, Hoang Oanh; Nguyen, Hong Ngoc; Srisuwan, Siraporn (2018). Journal of Economics and Development, 20(1), 68-85. Article Link.
Abstract: Intergenerational socioeconomic mobility is often attributed to cognitive factors like education, IQs, and heritability. Personality and values are believed to be heritable and stable over time, thus affecting the change in socioeconomic status among generations. This empirical study identifies the role of personality, values, and the interaction between them on the disparity in socioeconomic status between parents and children in Vietnam. Our research is based on a randomly-sampled survey of 450 students in different programs at the National Economics University (NEU). The estimation results indicate that besides education, most traits, among the big five traits, except openness and neuroticism, have significant positive effects on socioeconomic mobility. Furthermore, since values are considered to be behavioral manifestations of personality, we take into account the interactive effects of personality traits and personal values on socioeconomic mobility. It is interesting that we found many significant relations of personality-value interaction to socioeconomic mobility between generations. Additionally, gender inequality and the urban-rural gap are also illustrated in individuals’ socioeconomic positions.
Nguyen, Hoang Oanh; Nguyen, Hong Ngoc; Ho, Dinh Bao (2017). Journal of Economics and Development, 19(1), 39-50. Article Link.
Abstract: This paper uses the Propensity Score Matching method (PSM) to determine the criteria of eligibility for production and income subsidies and the Difference-in-Difference method (DID) to evaluate the impact of these policies on households’ economic well-being in Vietnam. The empirical results indicate that though these policies have not contributed to a clear economic well-being improvement of the participating households, their impacts tend to move in a positive direction. It should be noted that though these policies do not make the income/expenditure of the participating households increase, they help increase the income component from agricultural production significantly, especially for the group receiving production subsidies, and at the same time increase spending on durable goods and health care services in comparison with nonparticipating households.
Nguyen, Duc Thanh; Nguyen, Hong Ngoc (2017). Special Report to the Government, VEPR Policy Discussion PD-07. Link.
In Vietnam, the scale of public debt tends to increase dramatically and has approached the limit set by the National Assembly. This fact indicates the need to enhance the effectiveness of public debt management. Meanwhile, the Law on Public Debt Management in 2009, after eight years of implementation, has revealed some shortcomings that need to be amended and supplemented to better fit international practices and the public debt situation in Vietnam. In such context, the draft revision of the Law on Public Debt Management has been developed and is expected to be passed at the fourth session of the 14th National Assembly in October - November this year.
In general, the draft revision has been elaborately developed and has surmounted many limitations of the current law. However, there are still some controversial issues that need to be taken into consideration such as the need for prompt and comprehensive update of data on public debt, the scope of public debt, the safety threshold for public debt, and whether or not to centralize the public debt management in a single agency, namely the Ministry of Finance.
This paper consists of three main parts. In the first section, we analyze the current situation of public debt and public debt management in Vietnam, focusing on providing sharp discussion on the draft revision of the Law on Public Debt Management; Next, we investigate the experiences of countries around the world and also study the recommendations made by international organizations and experts, focusing on key aspects of the draft law; Finally, some recommendations for the Revised Law on Public Debt Management are proposed.
Nguyen, Duc Thanh; Nguyen, Hong Ngoc; Ly, Dai Hung (2017). Viet Nam Quarterly Macroeconomic Report: Quarter 3 - 2017. VEPR. Link.
Nguyen, Duc Thanh; Nguyen, Thanh Tung; Nguyen, Hong Ngoc (2017). Viet Nam Quarterly Macroeconomic Report: Quarter 2 - 2017. VEPR. Link.
Nguyen, Duc Thanh; Nguyen, Thanh Tung; Nguyen, Hong Ngoc (2017). Viet Nam Quarterly Macroeconomic Report: Quarter 1 - 2017. VEPR. Link.
Nguyen, Hoang Oanh; Nguyen, Hong Ngoc (2016). Journal of Economics and Development, 18(2), 71-87. Article Link.
Abstract: This paper aims to evaluate the efficiency or the productivity of academic departments within a university using Data Envelopment Analysis. As an illustrative example, we investigate the performance of 57 departments of National Economics University (NEU) for three years, from 2013 to 2015. The data set consists of one input variable, which is the number of academic staff, and three output variables in which the number of research hours is considered as research output and the number of graduates and teaching load are defined as teaching outputs. Particularly, the output-oriented CCR, BCC, and SBM model under both the CRS and VRS assumptions are applied in order to determine accurate degrees of efficiency of individual departments and directions for performance improvement for less efficient ones. The output-oriented radial Malmquist DEA model is also employed to make a comparative analysis of the productivity change of the departments over the period. The results reveal some clear policy-making implications for departments to adjust their development plan in an appropriate way.
Pham, The Anh; Nguyen, Hong Ngoc (2015). Journal of Economics and Development (in Vietnamese), 216(II), 79-86. Article Link.
Abstract: This paper investigates the relationship between public debt and economic growth. By using panel regression with data from emerging and developing countries during 2001-2013, the paper indicates that the optimal level of public debt for economic growth for these countries, including Vietnam, is about 53-61 percent of GDP. Our analysis also shows that public debt should not exceed 61 percent of GDP, because beyond that level, it will be harmful for growth. Additionally, from the experience of the public debt management of four selected economies that have many similarities to Vietnam, we provide some policy recommendations for Vietnam in order to improve the current public debt situation.