Productivity Gap between Women- and Men-Run Private Hotels in Georgia: A Data Envelopment Analysis–Based Meta Frontier Analysis

This paper makes an initial attempt to account for differences in the technologies used by women- and men-run businesses, that is, technological “heterogeneity,” for better understanding productivity differences between the two groups. The paper applies meta frontier analysis to the efficiency of private hotels in Georgia estimated using the data envelopment analysis methodology. The exercise allows distinguishing between productivity differences conditional on the available technology to each group (technical efficiency) and due to differences in the available technology (technology gap). The findings show that gender-based differences in technical efficiency and the technology gap are very different in their direction, size, and distribution across low versus high levels of efficiency. For example, women-run hotels outperform men-run hotels in technical efficiency by 21 percentage points. However, this superior performance is almost fully countered by the inferior technology used by women due to the prevailing socio-cultural and economic environment. The findings also show that the impact of the technology gap on widening the productivity gap is much stronger at low levels of efficiency than at higher levels (the “sticky floors” effect). No such evidence is found for technical efficiency or overall efficiency. Thus, the existing literature, which assumes technological “homogeneity,” provides at best an incomplete picture of the true nature of gender-based productivity gaps and at worst, a misleading one. The main result survives endogeneity checks based on propensity score matching and is robust to several measures of productivity and outlier checks. Policy implications of the findings are discussed.