Bayesian cost efficiency of Luanda, Angola hotels

Abstract

This paper analyses the cost efficiency of Angola-Luanda hotels using a Bayesian stochastic frontier model. The results confirm that Luanda hotels have increased their cost efficiency over the period of study to reach an overall average of 67.11%. Results from the returns to scale also indicate that further improvements in efficiency are possible if Luanda hotels would increase the size and scale of their operations. Policy implications of the results are derived.

Keywords:

• Angola-Luanda hotels
• hotels
• Bayesian stochastic frontier model
• returns to scale
• cost efficiency