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When, where and how to perform efficiency estimation

Oleg Badunenko (), Daniel Henderson () and Subal Kumbhakar ()

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper we compare two flexible estimators of technical efficiency in a cross-sectional setting: the nonparametric kernel SFA estimator of Fan, Li and Weersink (1996) to the nonparametric bias corrected DEA estimator of Kneip, Simar andWilson (2008). We assess the finite sample performance of each estimator via Monte Carlo simulations and empirical examples. We find that the reliability of efficiency scores critically hinges upon the ratio of the variation in efficiency to the variation in noise. These results should be a valuable resource to both academic researchers and practitioners.

Keywords: Bootstrap; Nonparametric kernel; Technical efficiency (search for similar items in EconPapers)
JEL-codes: C14 (search for similar items in EconPapers)
Date: 2011-09-16
New Economics Papers: this item is included in nep-ecm
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Related works:
Journal Article: When, where and how to perform efficiency estimation (2012) Downloads
Working Paper: When, where and how to perform efficiency estimation (2011) Downloads
Working Paper: When, Where and How to Perform Efficiency Estimation (2011) Downloads
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