Testing for Productive Efficiency with Errors-in-Variables: with an application to the Dutch electricity sesctor
2001-04-19
Research Paper
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We develop a nonparametric test of productive efficiency that accounts for the possibility of errors-in-variables. The test allows for statistical inference based on the extreme value distribution of the L?? norm. In contrast to the test proposed by Varian, H (1985): 'Nonparametric Analysis of Optimising Behaviour with Measurement Error, Journal of Econometrics 30, 445-458, our test can be computed using simple enumeration algorithms or linear programming. An empirical application for the Dutch electricity sector illustrates the proposed test procedure.
Keywords
- data envelopment analysis (DEA)
- hypothesis testing
- errors-in-variables
- extreme value theory
- nonparametric production analysis
Classifications using
Journal of Economic Literature (JEL) Classification System
- C14 : Semiparametric and Nonparametric Methods
- G3 : Corporate Finance and Governance
- M : Business Administration and Business Economics; Marketing; Accounting
Automatically Extracted Terms
- efficiency
- 0.000
- production
- statistic
- analysis
- 0 j j
- netput
- approach
- distribution
- varian
- error
- profit
- profit efficiency
- programming
- variable
- value distribution
- pareto-koopmans efficiency
- pareto-koopman
- hypothesis
- section
