In response to escalating business travel costs, many firms have formed corporate travel management departments to help control these expenses. This study examines how efficiently these departments are operating by employing a stochastic frontier technique in addition to a linear programming procedure. Both of these methods construct efficient frontiers that represent the minimum costs that need to be allocated to corporate travel given the number of trips that firms take. Any costs incurred beyond the efficient frontiers are deemed excess, and the firms are classified as inefficient. The results using both procedures indicate that the corporate travel management departments are relatively efficient. In a competitive market, it is expected that more firms will begin to use in-house travel management departments to help control the rise of travel-related expenses.

This paper examines the developments in the production efficiency of the Austrian insurance market for the period 1994-1999 using firm-specific data on life/health and non-life insurers obtained from the Austrian insurance regulatory authority. The article uses a Bayesian stochastic frontier to obtain aggregate and firm-specific estimates of production efficiency across insurer types and time. The study provides strong evidence that the process of deregulation had positive effects on the production efficiency of Austrian insurers. The life/health and non-life firms showed similar patterns of development in that they were less efficient during the years 1994-1996 and significantly more efficient in 1997-1999. If the Austrian experience is representative, similar benefits from deregulation may be expected for the Central and Eastern European countries that prepare for the accession to the European Union. Copyright The Journal of Risk and Insurance.

This paper provides substantial evidence that real estate brokerage firms choosing to franchise are more cost-efficient than firms that remain independent. It uses 1995 cost data obtained from a nationwide survey of real estate brokerages to analyze the differences in firm efficiency across firm type-franchised and independent. We estimate a single stochastic cost frontier using Bayesian statistics and measure firm efficiency relative to that frontier conditional on firm type. The results indicate that real estate brokerages are relatively efficient, implying a competitive market, but franchised brokerages are substantially more efficient than their independent counterparts. Copyright American Real Estate and Urban Economics Association.

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