Asymptotic distribution of conical-hull estimators of directional edges

DOI10.1214/09-AOS746zbMATH Open1189.62055arXiv1010.0312OpenAlexW2074148974MaRDI QIDQ973868FDOQ973868

Authors: Byeong U. Park, Seok-Oh Jeong, Léopold Simar 

Publication date: 26 May 2010

Published in: The Annals of Statistics (Search for Journal in Brave)

Abstract: Nonparametric data envelopment analysis (DEA) estimators have been widely applied in analysis of productive efficiency. Typically they are defined in terms of convex-hulls of the observed combinations of $mathrminputsimesmathrmoutputs$ in a sample of enterprises. The shape of the convex-hull relies on a hypothesis on the shape of the technology, defined as the boundary of the set of technically attainable points in the $mathrminputsimesmathrmoutputs$ space. So far, only the statistical properties of the smallest convex polyhedron enveloping the data points has been considered which corresponds to a situation where the technology presents variable returns-to-scale (VRS). This paper analyzes the case where the most common constant returns-to-scale (CRS) hypothesis is assumed. Here the DEA is defined as the smallest conical-hull with vertex at the origin enveloping the cloud of observed points. In this paper we determine the asymptotic properties of this estimator, showing that the rate of convergence is better than for the VRS estimator. We derive also its asymptotic sampling distribution with a practical way to simulate it. This allows to define a bias-corrected estimator and to build confidence intervals for the frontier. We compare in a simulated example the bias-corrected estimator with the original conical-hull estimator and show its superiority in terms of median squared error.

Full work available at URL: https://arxiv.org/abs/1010.0312

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zbMATH Keywords

asymptotic distributionefficiencydata envelopment analysisDEAconstant returns-to-scaleCRSconical-hull

Mathematics Subject Classification ID

Nonparametric estimation (62G05) Asymptotic properties of nonparametric inference (62G20) Applications of statistics in engineering and industry; control charts (62P30) Asymptotic distribution theory in statistics (62E20)

Cites Work

• ASYMPTOTICS AND CONSISTENT BOOTSTRAPS FOR DEA ESTIMATORS IN NONPARAMETRIC FRONTIER MODELS
• On Estimation of Monotone and Concave Frontier Functions
• Measuring the efficiency of decision making units
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• On polynomial estimators of frontiers and boundaries
• Non-parametric tests of returns to scale
• On the asymptotic theory of subsampling
• Large Sample Approximation of the Distribution for Convex-Hull Estimators of Boundaries

Cited In (21)

• Inference for aggregate efficiency: theory and guidelines for practitioners
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• Semiparametric maximum likelihood estimation of stochastic frontier model with errors-in-variables
• WHEN BIAS KILLS THE VARIANCE: CENTRAL LIMIT THEOREMS FOR DEA AND FDH EFFICIENCY SCORES
• Cost-effectiveness measures on convex and nonconvex technologies
• Variable selection in data envelopment analysis
• Quasi-Bayesian Inference for Production Frontiers
• Data sharpening for improving central limit theorem approximations for data envelopment analysis-type efficiency estimators
• Aggregation of inputs and outputs prior to data envelopment analysis under big data
• Data envelopment analysis: from foundations to modern advancements
• Statistical inference for DEA estimators of directional distances
• A \(\Gamma\)-moment approach to monotonic boundary estimation
• Statistical Approaches for Non‐parametric Frontier Models: A Guided Tour
• Fast and efficient computation of directional distance estimators
• Finding the right yardstick: regulation of electricity networks under heterogeneous environments
• Subsampling bootstrap in network DEA
• Robust Efficiency Analysis of Public Hospitals in Queensland, Australia
• Improving finite sample approximation by central limit theorems for estimates from data envelopment analysis
• Dimension reduction in nonparametric models of production
• Frontier estimation in the presence of measurement error with unknown variance
• Technical, allocative and overall efficiency: estimation and inference

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