Incorporating the Operating Environment Into a Nonparametric Measure of Technical Efficiency

Harold Fried, Shelton Schmidt and Suthathip Yaisawarng

Journal of Productivity Analysis, 1999, vol. 12, issue 3, 249-267

Abstract: The ability of a production unit to transform inputs into outputs is influenced by its technical efficiency and external operating environment. This paper introduces a nonparametric, linear programming, frontier procedure for obtaining a measure of managerial efficiency that controls for exogenous features of the operating environment. The approach also provides statistical tests of the effects of external conditions on the efficient use of each individual input (for an input oriented model) or for each individual output (for an output oriented model). The procedure is illustrated for a sample of nursing homes. Copyright Kluwer Academic Publishers 1999

Keywords: External operating environment; nonparametric linear programming; composite managerial efficiency (search for similar items in EconPapers)
Date: 1999
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DOI: 10.1023/A:1007800306752

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