Investigating economic efficiency in Italy: A regional comparison

This paper provides a comparative analysis of the hospitality sector using the island of Sardinia and the autonomous province of Bolzano as a case study. The comparison holds its own interest since they are both tourism destinations, though characterised by different features as far as seasonality is concerned. Employing a large sample set, pure technical and scale efficiency are computed using a panel data envelopment analysis. Overall, the empirical findings reveal that the hospitality sector in Sardinia and in Bolzano can be regarded as economically inefficient and mostly depicting decreasing returns to scale. Nevertheless, some distinctive features are detected amongst firms classified by size. Policy implications are drawn to help economic agents to improve their efficiency scores, thus leading to an optimal revenue management strategy.