Oriented stochastic data envelopment models: Ranking comparison to stochastic frontier approach

František Brázdik

CERGE-EI Working Papers from The Center for Economic Research and Graduate Education - Economics Institute, Prague

Abstract: Results of data envelopment analysis sensitively respond to stochastic noise in the data. In this paper, by introduction of output augmentation and input reduction I extend additive models for stochastic data envelopment analysis (SDEA), which were developed by Li (1998) to handle the noise in the data. Applying the linearization procedure by Li (1998) the linearized versions of models are derived. In the empirical part of this work, the effi- ciency scores of Indonesian rice farms are computed. The computed scores are compared to the stochastic frontier approach scores by Druska and Horrace (2004) and weak ranking consistency with results of stochastic frontier method is observed.

Keywords: Stochastic data envelopment analysis; linear programming; efficiency; rice farm. (search for similar items in EconPapers)
JEL-codes: C14 C61 L23 Q12 (search for similar items in EconPapers)
Date: 2005-08
New Economics Papers: this item is included in nep-ecm and nep-eff
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