X-INEFFICIENCY IN THE PUBLIC-SECTOR - THE CASE OF LIBRARIES

A short-run total cost function is fitted to 1992 data for 235 public libraries in New York state. The stochastic frontier model is employed , which decomposes the error term into a random variable for statistic al noise and a residual component measuring economic inefficiency. Mea n X-inefficiency (cost inefficiency) is estimated to be 24%. Governmen t-run public libraries are about 3% more inefficient than private not- for-profit public libraries. Funding sources also influence efficiency . The greater the proportion of funds derived from local taxation and from gifts, the more efficient the library.