Advanced Search
MyIDEAS: Login to save this paper or follow this series

Comparing Efficiency Across Markets: An Extension and Critique of the Zhang and Bartels (1998) Methodology

Contents:

Author Info

  • Ruben Chumpitaz

    (IESEG School of Management, LEM-CNRS (UMR 8179))

  • Kristiaan Kerstens

    ()
    (CNRS-LEM (UMR 8179), IESEG School of Management)

  • Nicholas Paparoidamis

    (IESEG School of Management, LEM-CNRS (UMR 8179))

Abstract

The use of non-parametric frontier methods for the evaluation of product market efficiency in heterogeneous markets seems to have gained some popularity recently. However, the statistical properties of these frontier estimators have been largely ignored. The main point is that nonparametric frontier estimators are biased and that the degree of bias depends on specific sample properties, most importantly sample size and number of dimensions of the model. To investigate the effect of this bias on comparing market efficiency, this contribution estimates the efficiency for several datasets for two main product categories. Following Zhang and Bartels (1998), these results comprise re-estimates for the larger samples limiting their size to that of the smaller samples when the model dimensions for different samples are identical. Furthermore, sample sizes are adjusted to mitigate the eventual differences in dimensions in specification. This allows comparing market efficiency for different markets on a more equal footing, since it reduces the bias effect to a minimum making the comparison of market efficiency possible. However, the article also points out the critical limitations of this Zhang and Bartels (1998) approach in certain respects. Apart from reporting these negative results, we also offer some suggestions for future work.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://my.ieseg.fr/bienvenue/DownloadDoc.asp?Fich=177455078_2010-ECO-01_Chumpitaz_Kerstens_Paparoidamis_Staat.pdf
Download Restriction: no

File URL:
Download Restriction: no

Bibliographic Info

Paper provided by IESEG School of Management in its series Working Papers with number 2010-ECO-01.

as in new window
Length: 24 pages
Date of creation: Jan 2010
Date of revision:
Handle: RePEc:ies:wpaper:e201001

Contact details of provider:
Postal: 3, rue de la Digue, FR-59000 Lille
Phone: +33/320545892
Fax: +33/320574855
Web page: http://www.ieseg.fr/
More information through EDIRC

Related research

Keywords: Market Efficiency; Heterogeneous Product Markets; Bias; Monte-Carlo Simulation;

This paper has been announced in the following NEP Reports:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ies:wpaper:e201001. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Monika Marin).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.