Abstract:

This paper applies data envelopment analysis (DEA) to the Swiss construction industry in different Cantons. In some Cantons the market is relatively competitive, in others non-competitive procurement rules are expected to raise the equilibrium prices. If the firms in different markets use the same technology, price differences between the two classes of Cantons can be infered from best practice frontiers. The data envelopment analysis estimates the price difference due to non competitive and protectionist government purchasing behavior to be approximately 6.3%.