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A Monte Carlo Study of Old and New Frontier Methods for Efficiency Measurement

Krüger, Jens (2011):
A Monte Carlo Study of Old and New Frontier Methods for Efficiency Measurement.
Darmstadt, In: Darmstadt Discussion Papers in Economics, [Report]

Abstract

This study presents the results of an extensive Monte Carlo experiment to compare different methods of efficiency analysis. In addition to traditional parametric-stochastic and nonparametric-deterministic methods recently developed robust nonparametric-stochastic methods are considered. The experimental design comprises a wide variety of situations with different returns-to-scale regimes, substitution elasticities and outlying observations. As the results show, the new robust nonparametric-stochastic methods should not be used without cross-checking by other methods like stochastic frontier analysis or data envelopment analysis. These latter methods appear quite robust in the experiments.

Item Type: Report
Erschienen: 2011
Creators: Krüger, Jens
Title: A Monte Carlo Study of Old and New Frontier Methods for Efficiency Measurement
Language: English
Abstract:

This study presents the results of an extensive Monte Carlo experiment to compare different methods of efficiency analysis. In addition to traditional parametric-stochastic and nonparametric-deterministic methods recently developed robust nonparametric-stochastic methods are considered. The experimental design comprises a wide variety of situations with different returns-to-scale regimes, substitution elasticities and outlying observations. As the results show, the new robust nonparametric-stochastic methods should not be used without cross-checking by other methods like stochastic frontier analysis or data envelopment analysis. These latter methods appear quite robust in the experiments.

Series Name: Darmstadt Discussion Papers in Economics
Volume: 200
Place of Publication: Darmstadt
Uncontrolled Keywords: Monte Carlo experiment, efficiency measurement, nonparametric stochastic methods
Divisions: 01 Department of Law and Economics
01 Department of Law and Economics > Volkswirtschaftliche Fachgebiete
01 Department of Law and Economics > Volkswirtschaftliche Fachgebiete > Emprical Economics
Date Deposited: 07 Feb 2011 12:30
Additional Information:

C14, D24, C15

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