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Metatechnology frontier and convexity: A restatement

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  • Kerstens, Kristiaan
  • O’Donnell, Christopher
  • Van de Woestyne, Ignace

Abstract

This article reconsiders the way metafrontiers and associated measures of efficiency are obtained from nonparametric estimates of underlying group-specific frontiers. Both convex and non-convex metasets have been applied, but the large majority of articles applying this popular methodology assume that the metafrontier envelops a convex metaset. We argue that associated estimates of efficiency are potentially unreliable. We develop a refined methodology for nonparametric envelopment of non-convex metasets. We apply our methodology to a secondary data set to illustrate the potential errors associated with the currently established methods. Anticipating our main conclusion, we find that the convexification strategy consisting in assuming a convex metaset generally leads to erroneous results.

Suggested Citation

  • Kerstens, Kristiaan & O’Donnell, Christopher & Van de Woestyne, Ignace, 2019. "Metatechnology frontier and convexity: A restatement," European Journal of Operational Research, Elsevier, vol. 275(2), pages 780-792.
  • Handle: RePEc:eee:ejores:v:275:y:2019:i:2:p:780-792
    DOI: 10.1016/j.ejor.2018.11.064
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