Developing foreign bank efficiency models for DEA grounded in finance theory

We develop foreign bank technical, cost and profit efficiency models for particular application with data envelopment analysis (DEA). Key motivations for the paper are (a) the often-observed practice of choosing inputs and outputs where the selection process is poorly explained and linkages to theory are unclear, and (b) foreign bank productivity analysis, which has been neglected in DEA banking literature. The main aim is to demonstrate a process grounded in finance and banking theories for developing bank efficiency models, which can bring comparability and direction to empirical productivity studies. We expect this paper to foster empirical bank productivity studies.

Optimal Paths and Costs of Adjustment in Dynamic DEA Models: With Application to Chilean Department Stores

In this paper we propose a range of dynamic data envelopment analysis (DEA) models which allow information on costs of adjustment to be incorporated into the DEA framework. We first specify a basic dynamic DEA model predicated on a number or simplifying assumptions. We then outline a number of extensions to this model to accommodate asymmetric adjustment costs, non-static output quantities, non-static input prices, and non-static costs of adjustment, technological change, quasi-fixed inputs and investment budget constraints. The new dynamic DEA models provide valuable extra information relative to the standard static DEA models-they identify an optimal path of adjustment for the input quantities, and provide a measure of the potential cost savings that result from recognising the costs of adjusting input quantities towards the optimal point. The new models are illustrated using data relating to a chain of 35 retail department stores in Chile. The empirical results illustrate the wealth of information that can be derived from these models, and clearly show that static models overstate potential cost savings when adjustment costs are non-zero.

How does your model grow? An empirical investigation of the effects of ontological clarity and application domain size on query performance

Semantic data models provide a map of the components of an information system. The characteristics of these models affect their usefulness for various tasks (e.g., information retrieval). The quality of information retrieval has obvious important consequences, both economic and otherwise. Traditionally, data base designers have produced parsimonious logical data models. In spite of their increased size, ontologically clearer conceptual models have been shown to facilitate better performance for both problem solving and information retrieval tasks in experimental settings. The experiments producing evidence of enhanced performance for ontologically clearer models have, however, used application domains of modest size. Data models in organizational settings are likely to be substantially larger than those used in these experiments. This research used an experiment to investigate whether the benefits of improved information retrieval performance associated with ontologically clearer models are robust as the size of the application domains increase. The experiment used an application domain of approximately twice the size as tested in prior experiments. The results indicate that, relative to the users of the parsimonious implementation, end users of the ontologically clearer implementation made significantly more semantic errors, took significantly more time to compose their queries, and were significantly less confident in the accuracy of their queries.

An empirical study of Hoelfding Racing for model selction in K-nearest neighbor classification

Racing algorithms have recently been proposed as a general-purpose method for performing model selection in machine teaming algorithms. In this paper, we present an empirical study of the Hoeffding racing algorithm for selecting the k parameter in a simple k-nearest neighbor classifier. Fifteen widely-used classification datasets from UCI are used and experiments conducted across different confidence levels for racing. The results reveal a significant amount of sensitivity of the k-nn classifier to its model parameter value. The Hoeffding racing algorithm also varies widely in its performance, in terms of the computational savings gained over an exhaustive evaluation. While in some cases the savings gained are quite small, the racing algorithm proved to be highly robust to the possibility of erroneously eliminating the optimal models. All results were strongly dependent on the datasets used.