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| Measuring the Efficiency of Residential
Real Estate Brokerage Firms Author: Randy I. Anderson, Robert Fok, Leonard V. Zumpano, and Harold W. Elder Start Page: 139 Abstract: This article measures
overall, allocative, technical, pure technical and scale efficiency levels for a sample of
residential real estate brokerage firms using data envelopment analysis, a
linear-programming technique. The results suggest that real estate brokerage firms operate
inefficiently. Inefficiencies are primarily a function of sub-optimal input allocations
and the failure to operate at constant returns to scale rather than from poor input
utilization. Regression analysis is employed to determine which firm and/or market
characteristics affect efficiency levels. The results show that increasing firm size
increases efficiency while choosing to franchise, adding an additional multiple listing
service and increasing operating leverage decreases firm performance. |
