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Ranking efficiency units in DEA using bootstrapping an applied analysis for Slovenian farm data

Gocht, A. and Balcombe, K. (2006) Ranking efficiency units in DEA using bootstrapping an applied analysis for Slovenian farm data. Agricultural Economics, 35 (2). pp. 223-229. ISSN 0169-5150

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To link to this item DOI: 10.1111/j.1574-0862.2006.00155.x

Abstract/Summary

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).

Item Type:Article
Refereed:Yes
Divisions:Faculty of Life Sciences > School of Agriculture, Policy and Development
ID Code:8586
Uncontrolled Keywords:Data envelopment analysis, Bootstrapping, Agriculture, Technical efficiency, Confidence intervals, Slice DEA model, GAMS

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