Estimating and explaining efficiency in a multilevel setting: A robust two-stage approach

Kristof De Witte and Marijn Verschelde ()

Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium from Ghent University, Faculty of Economics and Business Administration

Abstract: Various applications require multilevel settings (e.g., for estimating fixed and random effects). However, due to the curse of dimensionality, the literature on non-parametric efficiency analysis did not yet explore the estimation of performance drivers in highly multilevel settings. As such, it lacks models which are particularly designed for multilevel estimations. This paper suggests a semi-parametric two-stage framework in which, in a first stage, non-parametric efficiency estimators are determined. As such, we do not require any a priori information on the production possibility set. In a second stage, a semiparametric Generalized Additive Mixed Model (GAMM) examines the sign and significance of both discrete and continuous background characteristics. The proper working of the procedure is illustrated by simulated data. Finally, the model is applied on real life data. In particular, using the proposed robust two-stage approach, we examine a claim by the Dutch Ministry of Education in that three out of the twelve Dutch provinces would provide lower quality education. When properly controlled for abilities, background variables, peer group and ability track effects, we do not observe differences among the provinces in educational attainments

Keywords: Productivity estimation; Multilevel setting; Generalized Additive Mixed Model; Education; Social segregation (search for similar items in EconPapers)
JEL-codes: C14 C25 I21 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2010-07
New Economics Papers: this item is included in nep-ecm and nep-eff
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:rug:rugwps:10/657

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