Nonparametric Analysis of Technology and Productivity under Non-Convexity
AbstractThis paper investigates the nonparametric analysis of technology under non-convexity. The analysis extends two approaches now commonly used in efficiency and productivity analysis: Data Envelopment Analysis (DEA) where convexity is imposed; and Free Disposal Hull (FDH) models. We argue that, while the FDH model allows for non-convexity, its representation of non-convexity is too extreme. We propose a new nonparametric model that relies on a neighborhood-based technology assessment which allows for less extreme forms of non-convexity. The distinctive feature of our approach is that it allows for non-convexity to arise in any part of the feasible set. We show how it can be implemented empirically by solving simple linear programming problems. And we illustrate the usefulness of the approach in an empirical application to the analysis of technical and scale efficiency on Korean farms.
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Bibliographic InfoPaper provided by Agricultural and Applied Economics Association in its series 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. with number 149684.
Date of creation: 2013
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technology; productivity; nonparametric; non-convexity; Farm Management; Production Economics; Productivity Analysis; Research Methods/ Statistical Methods;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-06-24 (All new papers)
- NEP-ECM-2013-06-24 (Econometrics)
- NEP-EFF-2013-06-24 (Efficiency & Productivity)
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