DEA-based hypothesis tests for comparing two groups of decision making units
AbstractIn this paper, we develop five statistical tests to compare the efficiencies of different groups of DMUs. We consider a data generating process (DGP) that models the deviation of the output from the best practice frontier as the sum of two components, a one-sided inefficiency term and a two-sided random noise term. We use simulation to evaluate the performance of the five tests against the Banker tests (Banker, 1993) that were designed for DGPs containing a single one-sided error term. It is found that while the Banker tests are very effective when efficiency dominates noise, the tests developed in this paper perform better than the Banker tests when noise levels are significant.
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Bibliographic InfoArticle provided by Elsevier in its journal European Journal of Operational Research.
Volume (Year): 206 (2010)
Issue (Month): 1 (October)
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Web page: http://www.elsevier.com/locate/eor
Data envelopment analysis Hypothesis tests Data generating process Efficiency comparison;
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- Antonella Basso & Stefania Funari, 2012. "Constant and variable returns to scale DEA models for socially responsible investment funds," Working Papers 2012_20, Department of Economics, University of Venice "Ca' Foscari".
- Macpherson, Alexander J. & Principe, Peter P. & Smith, Elizabeth R., 2010. "A directional distance function approach to regional environmental-economic assessments," Ecological Economics, Elsevier, vol. 69(10), pages 1918-1925, August.
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