Comparing Input- and Output-Oriented Measures of Technical Efficiency to Determine Local Returns to Scale in DEA Models

This paper shows how one can infer the nature of local returns to scale at the input- or output-oriented efficient projection of a technically inefficient input-output bundle, when the input- and output-oriented measures of efficiency differ.

Efficiency Bounds for Estimating Linear Functionals of Nonparametric Regression Models with Endogenous Regressors

Consider a nonparametric regression model Y=mu*(X) + e, where the explanatory variables X are endogenous and e satisfies the conditional moment restriction E[e|W]=0 w.p.1 for instrumental variables W. It is well known that in these models the structural parameter mu* is 'ill-posed' in the sense that the function mapping the data to mu* is not continuous. In this paper, we derive the efficiency bounds for estimating linear functionals E[p(X)mu*(X)] and int_{supp(X)}p(x)mu*(x)dx, where p is a known weight function and supp(X) the support of X, without assuming mu* to be well-posed or even identified.

Improving Surveying Accuracy and Efficiency in Connecticut: An Accuracy Assessment of GEOID03 and GEOID09

Comparing published NAVD 88 Helmert orthometric heights of First-Order bench marks against GPS-determined orthometric heights showed that GEOID03 and GEOID09 perform at their reported accuracy in Connecticut. GPS-determined orthometric heights were determined by subtracting geoid undulations from ellipsoid heights obtained from a network least-squares adjustment of GPS occupations in 2007 and 2008. A total of 73 markers were occupied in these stability classes: 25 class A, 11 class B, 12 class C, 2 class D bench marks, and 23 temporary marks with transferred elevations. Adjusted ellipsoid heights were compared against OPUS as a check. We found that: the GPS-determined orthometric heights of stability class A markers and the transfers are statistically lower than their published values but just barely; stability class B, C and D markers are also statistically lower in a manner consistent with subsidence or settling; GEOID09 does not exhibit a statistically significant residual trend across Connecticut; and GEOID09 out-performed GEOID03. A "correction surface" is not recommended in spite of the geoid models being statistically different than the NAVD 88 heights because the uncertainties involved dominate the discrepancies. Instead, it is recommended that the vertical control network be re-observed.

The Directional Distance Function and Measurement of Super-Efficiency: An Application to Airlines Data

Lovell and Rouse (LR) have recently proposed a modification of the standard DEA model that overcomes the infeasibility problem often encountered in computing super-efficiency. In the LR procedure one appropriately scales up the observed input vector (scale down the output vector) of the relevant super-efficient firm thereby usually creating its inefficient surrogate. An alternative procedure proposed in this paper uses the directional distance function introduced by Chambers, Chung, and Färe and the resulting Nerlove-Luenberger (NL) measure of super-efficiency. The fact that the directional distance function combines features of both an input-oriented and an output-oriented model, generally leads to a more complete ranking of the observations than either of the oriented models. An added advantage of this approach is that the NL super-efficiency measure is unique and does not depend on any arbitrary choice of a scaling parameter. A data set on international airlines from Coelli, Perelman, and Griffel-Tatje (2002) is utilized in an illustrative empirical application.

Input Aggregation in Models of Data Envelopment Analysis: A Statistical Test with an Application to Indian Manufacturing

A problem frequently encountered in Data Envelopment Analysis (DEA) is that the total number of inputs and outputs included tend to be too many relative to the sample size. One way to counter this problem is to combine several inputs (or outputs) into (meaningful) aggregate variables reducing thereby the dimension of the input (or output) vector. A direct effect of input aggregation is to reduce the number of constraints. This, in its turn, alters the optimal value of the objective function. In this paper, we show how a statistical test proposed by Banker (1993) may be applied to test the validity of a specific way of aggregating several inputs. An empirical application using data from Indian manufacturing for the year 2002-03 is included as an example of the proposed test.