The efficiency of private pension companies using dynamic data envelopment analysis

Yonca Erdem Demirtaş; Neslihan Fidan Keçeci; Yonca Erdem Demirtaş; Neslihan Fidan Keçeci

doi:10.3934/QFE.2020009

Quantitative Finance and Economics

2020, Volume 4, Issue 2: 204-219. doi: 10.3934/QFE.2020009

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Research article

The efficiency of private pension companies using dynamic data envelopment analysis

Quantitative Methods Department, School of Business, Istanbul University, Avcilar, Istanbul, Turkey

Received: 03 March 2020 Accepted: 31 March 2020 Published: 07 April 2020
JEL Codes: C61, D2, G22

Saving plays an important role in economics. Private Pension System (PPS) helps individuals make savings and contribute to the nation's economy. Therefore, it is important to know the performance of Private Pension Companies (PPCs) that manage the pension funds. Data Envelopment Analysis (DEA) is one of the useful nonparametric techniques to measure the relative efficiency of Decisions Making Units (DMUs) for a specific time or process. In this study, relative efficiency scores of PPCs are investigated for a time interval with Dynamic DEA and compared with the traditional DEA. Inputs of the model are considered as the number of workers, total assets; and the outputs of the model are the number of contracts, total contribution and the market share of each PPC. Also, to ensure the dynamic procedure, Shareholders' Equity is used as a quasi-fixed input data to link consecutive periods in the time interval. Our results demonstrate that the efficiency score can be improved by considering the effects of the inter-relations of the consecutive periods. The implications arising from the results of the study are important for the companies' policies.
- network DEA,
- dynamic DEA,
- pension companies,
- efficiency analysis,
- quasi-fixed inputs
Citation: Yonca Erdem Demirtaş, Neslihan Fidan Keçeci. The efficiency of private pension companies using dynamic data envelopment analysis[J]. Quantitative Finance and Economics, 2020, 4(2): 204-219. doi: 10.3934/QFE.2020009

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Abstract

Saving plays an important role in economics. Private Pension System (PPS) helps individuals make savings and contribute to the nation's economy. Therefore, it is important to know the performance of Private Pension Companies (PPCs) that manage the pension funds. Data Envelopment Analysis (DEA) is one of the useful nonparametric techniques to measure the relative efficiency of Decisions Making Units (DMUs) for a specific time or process. In this study, relative efficiency scores of PPCs are investigated for a time interval with Dynamic DEA and compared with the traditional DEA. Inputs of the model are considered as the number of workers, total assets; and the outputs of the model are the number of contracts, total contribution and the market share of each PPC. Also, to ensure the dynamic procedure, Shareholders' Equity is used as a quasi-fixed input data to link consecutive periods in the time interval. Our results demonstrate that the efficiency score can be improved by considering the effects of the inter-relations of the consecutive periods. The implications arising from the results of the study are important for the companies' policies.

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