Testing over-representation of observations in subsets of a DEA technology

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This paper proposes a test for whether data are over-represented in a given production zone, i.e. a subset of a production possibility set which has been estimated using the non-parametric Data Envelopment Analysis (DEA) approach. A binomial test is used that relates the number of observations inside such a zone to a discrete probability weighted relative volume of that zone. A Monte Carlo simulation illustrates the performance of the proposed test statistic and provides good estimation of both facet probabilities and the assumed common inefficiency distribution in a three dimensional input space. Potential applications include tests for whether benchmark units dominate more (or less) observations than expected.
Original languageEnglish
JournalEuropean Journal of Operational Research
Volume230
Issue number1
Pages (from-to)88-96
Number of pages9
ISSN0377-2217
DOIs
Publication statusPublished - 2013

ID: 45558921