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Metatechnology frontier and convexity: A restatement

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  • Kristiaan Kerstens

    () (Department of Economics - IESEG School of Managementg, LEM - Lille économie management - LEM - UMR 9221 - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique)

  • Christopher O’donnell
  • Ignace van de Woestyne

    () (Department of Economics - Hogeschool-Universiteit Brussel)

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

  • Kristiaan Kerstens & Christopher O’donnell & Ignace van de Woestyne, 2019. "Metatechnology frontier and convexity: A restatement," Post-Print hal-02108502, HAL.
  • Handle: RePEc:hal:journl:hal-02108502
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-02108502
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