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Ranking efficiency units in DEA using bootstrapping an applied analysis for Slovenian farm data
Author(s) -
Gocht Alexander,
Balcombe Kelvin
Publication year - 2006
Publication title -
agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.29
H-Index - 82
eISSN - 1574-0862
pISSN - 0169-5150
DOI - 10.1111/j.1574-0862.2006.00155.x
Subject(s) - bootstrapping (finance) , data envelopment analysis , statistic , econometrics , ranking (information retrieval) , inference , statistics , variable (mathematics) , statistical inference , computer science , sample (material) , efficiency , point (geometry) , mathematics , artificial intelligence , mathematical analysis , chemistry , geometry , chromatography , estimator
This article explores how data envelopment analysis (DEA), along with a smoothed bootstrap method, can be used in applied analysis to obtain more reliable efficiency rankings for farms. The main focus is the smoothed homogeneous bootstrap procedure introduced by Simar and Wilson (1998) to implement statistical inference for the original efficiency point estimates. Two main model specifications, constant and variable returns to scale, are investigated along with various choices regarding data aggregation. The coefficient of separation (CoS), a statistic that indicates the degree of statistical differentiation within the sample, is used to demonstrate the findings. The CoS suggests a substantive dependency of the results on the methodology and assumptions employed. Accordingly, some observations are made on how to conduct DEA in order to get more reliable efficiency rankings, depending on the purpose for which they are to be used. In addition, attention is drawn to the ability of the SLICE MODEL, implemented in GAMS, to enable researchers to overcome the computational burdens of conducting DEA (with bootstrapping).