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Probabilistic characterization of directional distances and their robust versions

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  • Simar, Léopold
  • Vanhems, Anne

Abstract

In this work, we analyze the performance of production units using the directional distance function which allows to measure the distance to the frontier of the production set along any direction in the inputs/outputs space. We show that this distance can be expressed as a simple transformation of radial or hyperbolic distance. This formulation allows to define robust directional distances in the lines of α-quantile or order-m partial frontiers and also conditional directional distance functions, conditional to environmental factors. We propose simple methods of estimation and derive the asymptotic properties of our estimators.

Suggested Citation

  • Simar, Léopold & Vanhems, Anne, 2012. "Probabilistic characterization of directional distances and their robust versions," Journal of Econometrics, Elsevier, vol. 166(2), pages 342-354.
    • Handle: RePEc:eee:econom:v:166:y:2012:i:2:p:342-354
    DOI: 10.1016/j.jeconom.2011.10.002
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Directional distance function; Partial frontier; Conditional measures of efficiency; Robust nonparametric estimation; Mutual funds performances;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General

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