Directional Distances and their Robust versions. Computational and Testing Issues
Directional distance functions provide very flexible tools for investigating the performance of Decision Making Units (DMUs). Their flexibility relies on their ability to handle undesirable outputs and to account for non-discretionary inputs and/or outputs by fixing zero values in some elements of the directional vector. Simar and Vanhems (2012) and Simar et al. (2012) indicate how the statistical properties of Farrell-Debreu type of radial efficiency measures can be transferred to directional distances. Moreover, robust versions of these distances are also available, for conditional and unconditional measures. BË˜adin et al. (2012) have shown how conditional radial distances are useful to investigate the effect of environmental factors on the production process. In this paper we develop the operational aspects for computing conditional and unconditional directional distances and their robust versions, in particular when some of the elements of the directional vector are fixed at zero. After that, we show how the approach of BË˜adin et al. (2012) can be adapted in a directional distance framework, including bandwidth selection and two-stage regression of conditional efficiency scores. Finally, we suggest a procedure, based on bootstrap techniques, for testing the significance of environmental factors on directional efficiency scores. The procedure is illustrated through simulated and real data.
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- Simar, Léopold & Vanhems, Anne, 2012.
"Probabilistic characterization of directional distances and their robust versions,"
Journal of Econometrics,
Elsevier, vol. 166(2), pages 342-354.
- Simar, Léopold & Vanhems, Anne, 2010. "Probabilistic Characterization of Directional Distances and their Robust Versions," TSE Working Papers 10-195, Toulouse School of Economics (TSE).
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- Cinzia Daraio & Léopold Simar, 2005. "Introducing Environmental Variables in Nonparametric Frontier Models: a Probabilistic Approach," Journal of Productivity Analysis, Springer, vol. 24(1), pages 93-121, 09.
- Cinzia Daraio & Leopold Simar, 2003. "Introducing Environmental Variables in Nonparametric Frontier Models: a Probabilistic Approach," LEM Papers Series 2003/17, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
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- Peter Hall & Jeff Racine & Qi Li, 2004. "Cross-Validation and the Estimation of Conditional Probability Densities," Journal of the American Statistical Association, American Statistical Association, vol. 99, pages 1015-1026, December.
- Daouia, Abdelaati & Simar, Léopold & Wilson, Paul, 2013. "Measuring Firm Performance using Nonparametric Quantile-type Distances," TSE Working Papers 13-412, Toulouse School of Economics (TSE), revised Nov 2013.
- Badin, Luiza & Daraio, Cinzia & Simar, Léopold, 2010. "Optimal bandwidth selection for conditional efficiency measures: A data-driven approach," European Journal of Operational Research, Elsevier, vol. 201(2), pages 633-640, March.
- Luiza Badin & Cinzia Daraio & Léopold Simar, 2008. "Optimal Bandwidth Selection for Conditional Efficiency Measures: a Data-driven Approach," LEM Papers Series 2008/22, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
- Daouia, Abdelaati & Simar, Leopold, 2007. "Nonparametric efficiency analysis: A multivariate conditional quantile approach," Journal of Econometrics, Elsevier, vol. 140(2), pages 375-400, October.
- Hayfield, Tristen & Racine, Jeffrey S., 2008. "Nonparametric Econometrics: The np Package," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 27(i05). Full references (including those not matched with items on IDEAS)
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