This paper develops a novel statistic for firm efficiency called efficiency depth that allows for statistical inference in case of errors-in-variables. We derive statistical tests that require minimal statistical assumptions; neither the sample distribution nor the noise level is required. An empirical illustration for European banks illustrates that - despite the minimal assumptions- the tests can have substantial discriminating power in practical applications.

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Erasmus Research Institute of Management
hdl.handle.net/1765/72
ERIM Report Series Research in Management
Erasmus Research Institute of Management

Kuosmanen, T., & Post, T. (2001). Non-Parametric Tests for Firm Efficiency in Case of Errors-in-Variables (No. ERS-2001-06-F&A). ERIM Report Series Research in Management. Retrieved from http://hdl.handle.net/1765/72