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Measuring technical efficiency and total factor productivity change with undesirable outputs in Stata

Author

Listed:
  • Daoping Wang

    (Shanghai University of Finance and Economics)

  • Kerui Du

    (Xiamen University)

  • Ning Zhang

    (Shandong University)

Abstract

In this article, we introduce two community-contributed data envelopment analysis commands for measuring technical efficiency and productivity change in Stata. Over the last decades, an important theoretical progression of data envelopment analysis, a nonparametric method widely used to assess the performance of decision-making units, is the incorporation of undesirable outputs. Models able to deal with undesirable outputs have been developed and applied in empirical studies for assessing the sustainability of decision-making units. These models are getting more and more attention from researchers and managers. The teddf command discussed in the present article allows users to measure technical efficiency, both radial and nonradial, when some outputs are undesirable. Tech- nical efficiency measures are obtained by solving linear programming problems. The gtfpch command we also describe here provides tools for measuring produc- tivity change, for example, the Malmquist–Luenberger index and the Luenberger indicator. We provide a brief overview of the nonparametric efficiency and produc- tivity change measurement accounting for undesirable outputs, and we describe the syntax and options of the new commands. We also illustrate with examples how to perform the technical efficiency and productivity analysis with the newly introduced commands.

Suggested Citation

  • Daoping Wang & Kerui Du & Ning Zhang, 2022. "Measuring technical efficiency and total factor productivity change with undesirable outputs in Stata," Stata Journal, StataCorp LP, vol. 22(1), pages 103-124, March.
    • Handle: RePEc:tsj:stataj:y:22:y:2022:i:1:p:103-124
    DOI: 10.1177/1536867X221083886
    Note: to access software from within Stata, net describe http://www.stata-journal.com/software/sj22-1/st0665/
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    File URL: http://hdl.handle.net/10.1177/1536867X221083886
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    Cited by:

    1. Halkos, George E. & Aslanidis, Panagiotis Stavros C., 2023. "New circular economy perspectives on measuring sustainable waste management productivity," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 764-779.
    2. Decai Tang & Zhangming Shan & Junxia He & Ziqian Zhao, 2022. "How Do Environmental Regulations and Outward Foreign Direct Investment Impact the Green Total Factor Productivity in China? A Mediating Effect Test Based on Provincial Panel Data," IJERPH, MDPI, vol. 19(23), pages 1-32, November.

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