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Testing scale efficiency in DEA models: a bootstrapping approach


  • Mickael Lothgren
  • Magnus Tambour


This paper presents a method for estimation and test of firm-specific scale efficiency using data envelopment analysis (DEA). The use of a simple bootstrap algorithm is proposed to perform firm-specific inference for scale efficiency. An empirical application using Swedish hospital data is provided. It is found that about 40% of the departments were scale efficient according to the original results. However, for about one-third of those departments the hypothesis of scale efficiency could be rejected.

Suggested Citation

  • Mickael Lothgren & Magnus Tambour, 1999. "Testing scale efficiency in DEA models: a bootstrapping approach," Applied Economics, Taylor & Francis Journals, vol. 31(10), pages 1231-1237.
  • Handle: RePEc:taf:applec:v:31:y:1999:i:10:p:1231-1237
    DOI: 10.1080/000368499323445

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    References listed on IDEAS

    1. Per Andersen & Niels Christian Petersen, 1993. "A Procedure for Ranking Efficient Units in Data Envelopment Analysis," Management Science, INFORMS, vol. 39(10), pages 1261-1264, October.
    2. Borden, James P., 1988. "An assessment of the impact of diagnosis-related group (DRG)-based reimbursement on the technical efficiency of New Jersey hospitals using data envelopment analysis," Journal of Accounting and Public Policy, Elsevier, vol. 7(2), pages 77-96.
    3. Blomqvist, Ake, 1991. "The doctor as double agent: Information asymmetry, health insurance, and medical care," Journal of Health Economics, Elsevier, vol. 10(4), pages 411-432.
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    Cited by:

    1. Daniel Friesner & Ron Mittelhammer & Robert Rosenmane, 2006. "Inferring the Latent Incidence of Inefficiency from DEA Estimates and Bayesian Priors," Working Papers 2006-8, School of Economic Sciences, Washington State University.
    2. Jakub Growiec & Anna Pajor & Dorota Gorniak & Artur Predki, 2015. "The shape of aggregate production functions: evidence from estimates of the World Technology Frontier," Bank i Kredyt, Narodowy Bank Polski, vol. 46(4), pages 299-326.
    3. Lamb, John D. & Tee, Kai-Hong, 2012. "Resampling DEA estimates of investment fund performance," European Journal of Operational Research, Elsevier, vol. 223(3), pages 834-841.
    4. Fengxia Dong & Allen Featherstone, 2006. "Technical and Scale Efficiencies for Chinese Rural Credit Cooperatives: A Bootstrapping Approach in Data Envelopment Analysis," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 4(1), pages 57-75.
    5. Kent Matthews & Zhiguo Xiao & Xu Zhang, 2009. "Rational Cost Inefficiency in Chinese Banks," Working Papers 292009, Hong Kong Institute for Monetary Research.
    6. Assaf, A., 2010. "Bootstrapped scale efficiency measures of UK airports," Journal of Air Transport Management, Elsevier, vol. 16(1), pages 42-44.
    7. Moradi-Motlagh, Amir & Babacan, Alperhan, 2015. "The impact of the global financial crisis on the efficiency of Australian banks," Economic Modelling, Elsevier, vol. 46(C), pages 397-406.
    8. Daniel Friesner & Matthew McPherson & Robert Rosenman, 2006. "Are Hospitals Seasonally Inefficient? Evidence from Washington State Hospitals," Working Papers 2006-3, School of Economic Sciences, Washington State University.

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