Blaming the exogenous environment? Conditional efficiency estimation with continuous and discrete environmental variables

Kristof De Witte and Mika Kortelainen

Working Papers of Department of Economics, Leuven from KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven

Abstract: This paper proposes a fully nonparametric framework to estimate relative efficiency of entities while accounting for a mixed set of continuous and discrete (both ordered and unordered) exogenous variables. Using robust partial frontier techniques, the probabilistic and conditional characterization of the production process, as well as insights from the recent developments in nonparametric econometrics, we present a generalized approach for conditional efficiency measurement. To do so, we utilize a tailored mixed kernel function with a data-driven bandwidth selection. So far only descriptive analysis for studying the effect of heterogeneity in conditional efficiency estimation has been suggested. We show how to use and interpret nonparametric bootstrap-based significance tests in a generalized conditional efficiency framework. This allows us to study statistical significance of continuous and discrete environmental variables. The proposed approach is illustrated by a sample of British pupils from the OECD Pisa data set. The results show that several exogenous discrete factors have a significant effect on the educational process.

Date: 2008-12
New Economics Papers: this item is included in nep-ecm and nep-eff
References: Add references at CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
https://lirias.kuleuven.be/bitstream/123456789/211063/1/DPS0833.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ete:ceswps:ces0833

Access Statistics for this paper

More papers in Working Papers of Department of Economics, Leuven from KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven
Bibliographic data for series maintained by library EBIB ().