Non-parametric tests of productive efficiency with errors-in-variables

Timo Kuosmanen, Thierry Post, Stefan Scholtes

Research output: Contribution to journalArticle

11 Citations (Scopus)

Abstract

We develop a non-parametric test of productive efficiency that accounts for errors-in-variables, following the approach of Varian. [1985. Nonparametric analysis of optimizing behavior with measurement error. Journal of Econometrics 30(1/2), 445-458]. The test is based on the general Pareto-Koopmans notion of efficiency, and does not require price data. Statistical inference is based on the sampling distribution of the L norm of errors. The test statistic can be computed using a simple enumeration algorithm. The finite sample properties of the test are analyzed by means of a Monte Carlo simulation using real-world data of large EU commercial banks.

Original languageEnglish
Pages (from-to)131-162
Number of pages32
JournalJournal of Econometrics
Volume136
Issue number1
DOIs
Publication statusPublished - Jan 1 2007

Keywords

  • Data envelopment analysis (DEA)
  • Errors-in-variables
  • Extreme value theory
  • Hypothesis testing
  • Non-parametric production analysis

ASJC Scopus subject areas

  • Economics and Econometrics

Fingerprint Dive into the research topics of 'Non-parametric tests of productive efficiency with errors-in-variables'. Together they form a unique fingerprint.

  • Cite this