A Bootstrap-Regression Procedure to Capture Unit Specific Effects In Data Envelopment Analysis
The Data Envelopment Analysis (DEA) efficiency score obtained for an individual firm is a point estimate without any confidence interval around it. In recent years, researchers have resorted to bootstrapping in order to generate empirical distributions of efficiency scores. This procedure assumes that all firms have the same probability of getting an efficiency score from any specified interval within the [0,1] range. We propose a bootstrap procedure that empirically generates the conditional distribution of efficiency for each individual firm given systematic factors that influence its efficiency. Instead of resampling directly from the pooled DEA scores, we first regress these scores on a set of explanatory variables not included at the DEA stage and bootstrap the residuals from this regression. These pseudo-efficiency scores incorporate the systematic effects of unit-specific factors along with the contribution of the randomly drawn residual. Data from the U.S. airline industry are utilized in an empirical application.
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Volume (Year): 39 (2004)
Issue (Month): 1 (January)
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- Léopold Simar & Paul W. Wilson, 1998.
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"Estimating efficiencies from frontier models with panel data: a comparison of parametric, non-parametric and semi-parametric metods with bootstrapping,"
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995, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Simar, L., 1991. "Estimating efficiencies from frontier models with panel data: a comparison of parametric, non-parametric and semi-parametric methods with boot strapping," CORE Discussion Papers 1991026, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
- SIMARÂ , LÃ©opold, 1995.
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1995061, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Simar,Â L., . "Aspects of statistical analysis in DEA-type frontier models," CORE Discussion Papers RP 1226, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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