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Testing over-representation of observations in subsets of a DEA technology

Author

Listed:
  • Asmild, Mette

    (ORMS Group)

  • Hougaard, Jens Leth

    (Department of Operations Management)

  • Olesen, Ole B.

    (Department of Business and Economics)

Abstract

This paper proposes a test for whether data are over-represented in a given production zone, i.e. a subset of a production possibility set which has been estimated using the non-parametric Data Envelopment Analysis (DEA) approach. A binomial test is used that relates the number of observations inside such a zone to a discrete probability weighted relative volume of that zone. A Monte Carlo simulation illustrates the performance of the proposed test statistic and suggests good estimation of both facet probabilities and the assumed common inefficiency distribution in a three dimensional input space.

Suggested Citation

  • Asmild, Mette & Hougaard, Jens Leth & Olesen, Ole B., 2010. "Testing over-representation of observations in subsets of a DEA technology," Discussion Papers on Economics 2/2010, University of Southern Denmark, Department of Economics.
    • Handle: RePEc:hhs:sdueko:2010_002
    as

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    References listed on IDEAS

    as
    1. Leopold Simar & Paul Wilson, 2000. "A general methodology for bootstrapping in non-parametric frontier models," Journal of Applied Statistics, Taylor & Francis Journals, vol. 27(6), pages 779-802.
    2. Léopold Simar & Paul Wilson, 2000. "Statistical Inference in Nonparametric Frontier Models: The State of the Art," Journal of Productivity Analysis, Springer, vol. 13(1), pages 49-78, January.
    3. Wheelock, David C & Wilson, Paul W, 1999. "Technical Progress, Inefficiency, and Productivity Change in U.S. Banking, 1984-1993," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 31(2), pages 212-234, May.
    4. J. Hartigan, 1985. "Statistical theory in clustering," Journal of Classification, Springer;The Classification Society, vol. 2(1), pages 63-76, December.
    5. Peter Bogetoft & Jens Hougaard, 2003. "Rational Inefficiencies," Journal of Productivity Analysis, Springer, vol. 20(3), pages 243-271, November.
    6. Léopold Simar & Paul W. Wilson, 1998. "Sensitivity Analysis of Efficiency Scores: How to Bootstrap in Nonparametric Frontier Models," Management Science, INFORMS, vol. 44(1), pages 49-61, January.
    7. R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
    8. Nam Anh Tran & Gerald Shively & Paul Preckel, 2010. "A new method for detecting outliers in Data Envelopment Analysis," Applied Economics Letters, Taylor & Francis Journals, vol. 17(4), pages 313-316.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Data Envelopment Analysis (DEA); Over-representation; Data density; Binomial test; Convex hull;
    All these keywords.

    JEL classification:

    • C00 - Mathematical and Quantitative Methods - - General - - - General
    • C40 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - General
    • C60 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - General
    • C80 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - General

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