Scandinavian Working Papers in Economics
HomeAboutSeriesSubject/JEL codesAdvanced Search
The Economic Research Institute, Stockholm School of Economics SSE/EFI Working Paper Series in Economics and Finance

No 179:
On the Consistency of the DEA-based Average Technical Efficiency Bootstrap

Mickael Löthgren ()

Abstract: This paper shows that the bootstrap algorithm for average technical efficiency by Atkinson and Wilson (1995) should be applied with great care for the Data Envelopment Analysis (DEA) estimator if the production frontier is stochastic. A stochastic frontier implies that the DEA estimator is inconsistent, which in turn leads to inconsistent and potentially highly misleading bootstrap confidence intervals. A Monte Carlo simulation study reveals that the bootstrap confidence interval coverage accuracy goes to zero as the sample size increases, even for small contributions of frontier variance to total frontier and efficiency variance.

Keywords: Bootstrap confidence intervals; Consistency; Data Envelopment Analysis; Distance function; Monte Carlo simulation; Stochastic frontier; (follow links to similar papers)

JEL-Codes: C14; C15; C21; D24; (follow links to similar papers)

14 pages, August 5, 1997

Download Statistics

This paper is published as:
Löthgren, Mickael, (2000), 'On the Consistency of the DEA-based Average Efficiency Bootstrap', Applied Economics Letters, Vol. 7, pages 53-57

Questions (including download problems) about the papers in this series should be directed to Helena Lundin ()
Report other problems with accessing this service to Sune Karlsson () or Helena Lundin ().

Programing by
Design by Joachim Ekebom

Handle: RePEc:hhs:hastef:0179 This page was generated on 2014-12-14 19:22:53