Data Envelopment Analysis in a Stochastic Setting: The right answer from the wrong model?

Publication: Working/Discussion PaperWorking Paper/Preprint


Data envelopment analysis (DEA) is compared to stochastic production function estimation (SPFE) in a noisy setting. The statistic of interest is the average efficiency estimator. Monte-Carlo simulations show that the mean squared error of the DEA-estimator even for considerable noise remains below the MSE of the SPFE analogue. A bootstrapping approach is designed to get some first-step statistical underpinning of this DEA average efficiency estimator. The coverage of the bootstrapping approximation to the distribution of this estimator is shown to be fairly good.
Original languageEnglish
Publication statusPublished - 1994

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