Using Total Factor Productivity and Data Envelopment Analysis for Performance Comparisons Among Government Enterprises: Concepts and Issues

Abstract

The purpose of this paper is to review and comment on a number of popular methods of performance measurement, in particular total factor productivity and data envelopment analysis; and to draw attention to potential pitfalls or misinterpretations which can arise in using these techniques. Potential users may not be aware that there are a number of different formulations and interpretations of these concepts, and that numerical measures of performance can vary considerably even when a consistent performance measure is being used.