scholarly journals Sensitivity of technical efficiency estimates to estimation methods: an empirical comparison of parametric and non-parametric approaches

2014 ◽  
Vol 8 (1) ◽  
pp. 67-72 ◽  
Author(s):  
Henry de-Graft Acquah
Keyword(s):  
Technical Efficiency ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Ordinary Least Squares ◽  
Estimation Methods ◽  
Strong Positive Correlation ◽  
Production Frontier ◽  
Frontier Analysis ◽  
Parametric Data ◽  
Non Parametric

This paper highlights the sensitivity of technical efficiency estimates to estimation approaches using empirical data. Firm specific technical efficiency and mean technical efficiency are estimated using the non parametric Data Envelope Analysis (DEA) and the parametric Corrected Ordinary Least Squares (COLS) and Stochastic Frontier Analysis (SFA) approaches. Mean technical efficiency is found to be sensitive to the choice of estimation technique. Analysis of variance and Tukey’s test suggests significant differences in means between efficiency scores from different methods. In general the DEA and SFA frontiers resulted in higher mean technical efficiency estimates than the COLS production frontier. The efficiency estimates of the DEA have the smallest variability when compared with the SFA and COLS. There exists a strong positive correlation between the efficiency estimates based on the three methods.  

Technical Efficiency Through Innovative Methods and Estimations in Financial Markets

2021 ◽  
pp. 55-70
Author(s):  
Aikaterini Kokkinou
Keyword(s):  
Financial Markets ◽  
Technical Efficiency ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Productive Efficiency ◽  
Data Envelopment ◽  
Frontier Analysis ◽  
Parametric Data ◽  
Efficiency Estimation ◽  
Non Parametric

This paper investigates technical efficiency estimation in financial markets, using both parametric and non-parametric techniques: parametric Stochastic Frontier Analysis (SFA) approach or non-parametric Data Envelopment Analysis (DEA). This chapter focuses on reviewing the stochastic frontier analysis literature regarding estimating inefficiency in financial markets level, as well as explaining producer heterogeneity along with the relationships with productive efficiency level. This chapter investigates technical efficiency estimation in financial markets, using both parametric and non-parametric techniques: parametric Stochastic Frontier Analysis (SFA) approach or non-parametric Data Envelopment Analysis (DEA). More specifically, this chapter focuses on reviewing the stochastic frontier analysis literature regarding estimating inefficiency, its industrial level, as well as explaining producer heterogeneity along with the relationships with productive efficiency level.

scholarly journals Farm Structure And Efficiency In The Hungarian Agriculture

2015 ◽  
Vol 4 (2) ◽  
pp. 51-56
Author(s):  
Orsolya Tóth ◽  
István Takács
Keyword(s):  
Technical Efficiency ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Farm Size ◽  
Empirical Literature ◽  
Data Envelopment ◽  
Frontier Analysis ◽  
Parametric Data ◽  
Legal Forms ◽  
On Farm

Abstract It has long been the subject of empirical researches to examine the technical efficiency on farm (micro) level. Two main methods are most often used in the empirical literature: the non-parametric Data Envelopment Analysis (DEA) based on linear programming, and the Stochastic Frontier Analysis (SFA) introduced by Aigner, Lovell and Schmidt (1977). The present study aimed to investigate the technical efficiency of farms involved in agricultural activities in Hungary using the DEA-method and the data from the Hungarian FADN database. The technical efficiency was examined based on legal forms, farm size categories and the type of farming between 2001 and 2013.

scholarly journals A Novel Hybrid Parametric and Non-Parametric Optimisation Model for Average Technical Efficiency Assessment in Public Hospitals during and Post-COVID-19 Pandemic

2021 ◽  
Vol 9 (1) ◽  
pp. 7
Author(s):  
Mirpouya Mirmozaffari ◽  
Reza Yazdani ◽  
Elham Shadkam ◽  
Seyed Mohammad Khalili ◽  
Leyla Sadat Tavassoli ◽  
...  
Keyword(s):  
Technical Efficiency ◽  
Financial Stability ◽  
Stochastic Frontier Analysis ◽  
Parametric Method ◽  
Stochastic Frontier ◽  
Integrated Approach ◽  
Public Hospitals ◽  
Statistical Testing ◽  
Frontier Analysis ◽  
Non Parametric

The COVID-19 pandemic has had a significant impact on hospitals and healthcare systems around the world. The cost of business disruption combined with lingering COVID-19 costs has placed many public hospitals on a course to insolvency. To quickly return to financial stability, hospitals should implement efficiency measure. An average technical efficiency (ATE) model made up of data envelopment analysis (DEA) and stochastic frontier analysis (SFA) for assessing efficiency in public hospitals during and after the COVID-19 pandemic is offered. The DEA method is a non-parametric method that requires no information other than the input and output quantities. SFA is a parametric method that considers stochastic noise in data and allows statistical testing of hypotheses about production structure and degree of inefficiency. The rationale for using these two competing approaches is to balance each method’s strengths, weaknesses and introduce a novel integrated approach. To show the applicability and efficacy of the proposed hybrid VRS-CRS-SFA (VCS) model, a case study is presented.

scholarly journals Eficiencia técnica de pesquerías con heterogeneidad inobservada

2019 ◽  
Vol 37 (3) ◽  
pp. 101
Author(s):  
David Castilla Espino ◽  
Juan José García del Hoyo
Keyword(s):  
Technical Efficiency ◽  
Latent Class ◽  
Stochastic Frontier Analysis ◽  
Unobserved Heterogeneity ◽  
Stochastic Frontier ◽  
Production Model ◽  
Stochastic Frontier Model ◽  
Production Frontier ◽  
Frontier Analysis ◽  
Production Activity

Fisheries production is subject to a significant variability caused no only by the stochastic nature of fisheries due to uncontrolled environmental and biological conditions, but also by factors related to production activity. It is necessary to take into consideration all these factors to avoid biases on production model estimates. This paper aims to go through this variability in Stochastic Frontier Analysis to account for observed and unobserved heterogeneity together with technical efficiency and randomness. This paper exemplifies the application of a Latent Class Stochastic Frontier model to the anchovy fishery of Southeastern Black Sea to account for production frontier heterogeneity. Results show a mean level of technical efficiency of 55%, which is higher than those produced by the standard stochastic frontier model. Moreover, results allow identifying two latent classes in the fleet. They also provide sound scientific advice for de management of the fishery.

scholarly journals Efficiency Comparison and Efficiency Development of the Metallurgical Industry in the EU: Parametric and Non-parametric Approaches

2020 ◽  
Vol 68 (4) ◽  
pp. 765-774
Author(s):  
Michaela Staňková
Keyword(s):  
Czech Republic ◽  
Production Efficiency ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Metallurgical Industry ◽  
Analysis Method ◽  
The Czech Republic ◽  
Frontier Analysis ◽  
Parametric Data ◽  
Non Parametric

This article deals with the development of technical (production) efficiency in the metallurgical industry in EU countries with an emphasis on the situation in the Czech Republic. The efficiency of individual countries was estimated for the period from 1995 to 2015. The parametric stochastic frontier analysis method with different settings was chosen to estimate efficiency and the results were verified using a competitive non-parametric data envelopment analysis method. It was found that during the period under review, there was an average increase in efficiency in the metallurgical industry. The largest increase in efficiency (confirmed by all types of models) was observed in the Czech Republic. A visible positive efficiency shift was also recorded in Spain and Greece. Surprisingly, there has been a decline in efficiency in Sweden and Italy.

scholarly journals Technical Efficiency of Smallholder Tomato Production in Semi-Urban Farms in Cameroon: A Stochastic Frontier Production Approach

2017 ◽  
Vol 7 (4) ◽  
pp. 27 ◽  
Author(s):  
Martin Paul Jr. Tabe-Ojong ◽  
Ernest L. Molua
Keyword(s):  
Technical Efficiency ◽  
Stochastic Frontier Analysis ◽  
Smallholder Farmers ◽  
Research Question ◽  
Stochastic Frontier ◽  
Negative Influence ◽  
Farm Size ◽  
Primary Data ◽  
Tomato Production ◽  
Frontier Analysis

Agriculture is the mainstay of Cameroon’s economy as it serves the purposes of food, livelihood and employment. Nevertheless, the country’s agriculture is plagued by low productivity and inefficiency in production. One of the main reasons for low productivity is the inability of farmers to fully exploit available technologies and production techniques. An important research question that comes to mind is, what are the major factors that hinder the technical efficiency of smallholder farmers? This study thus aimed to determine the level of technical efficiency in the production of tomato in smallholder farms, relying on primary data collected using a structured survey instrument administered to 80 tomato farmers in the Buea municipality of Cameroon. Data was analyzed using descriptive statistics and a stochastic frontier analysis method in the Cobb-Douglas production function. The STATA.14 software was used to obtain both stochastic frontier estimates and the determinants of technical efficiency. The results indicate that farmers are not fully technically efficient with a mean technical efficiency score of 0.68 with one farmer operating on the frontier. The study also revealed that most of the farmers irrespective of the size of the holdings have shown technical inefficiency problems. The older farmers were observed with the best measures of technical efficiency. Education, age and the adoption and practice of agronomic techniques had a positive and significant influence on technical efficiency while the nearest distance to the extension agent had a rather negative influence on technical efficiency. The input-output relationship showed that the area of tomato cultivation and the quantity of improved seed used were positive and significantly related to output at the 5% level of probability. As a result, it is recommended that farmers should increase their farm size, use of improved seeds and the adoption and practice of novel techniques in production. More emphasis should be placed on extension agents as they have a significant role to play in terms of improving and augmenting farmers’ education and information base through on farm demonstrations and result oriented workshops as all this will ensure increased production and productivity thereby increasing technical efficiency and achieving food self-sufficiency.

scholarly journals Technical Efficiency and Small Scale Maize Producers in Mwanza Region: A Stochastic Frontier Analysis

2021 ◽  
Vol 9 (3) ◽  
Author(s):  
Mukole Kongolo
Keyword(s):  
Technical Efficiency ◽  
Best Practice ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Likelihood Estimation ◽  
Estimation Procedure ◽  
Farm Size ◽  
Small Scale ◽  
Maize Production ◽  
Frontier Analysis

This study measured technical efficiency and its determinants in maize production by small-scale producers in Mwanza region, using a stochastic frontier production function approach. A randomly selected sample of participants in the two districts was used. The Maximum Likelihood estimation procedure was followed to obtain the determinants of technical efficiency and technical efficiency levels of small-scale maize producers. The minimum and maximum values of technical efficiency were between 20% and 91%, indicating that the least practices of specific producer operates at a minimum level of 20%, while the best practice producers  operate  at 91% technical efficiency  level respectively. The summary results of the mean technical efficiency was 63%. The main determinants of technical efficiency were labour, farm size, producer’s experience, producer’s age, family size which were all positive and statistically significant. The findings suggest that the average efficiency of small-scale maize producers could be improved by 37% through better use of existing resources and technology. These findings highlight the need for action by government to assist small-scale maize producers improve efficiency.

scholarly journals Technical Efficiency among Pepper Farmers in Sarawak, Malaysia: A Stochastic Frontier Analysis

2020 ◽  
Vol 10 (3) ◽  
pp. 729-739
Author(s):  
Anita Rosli ◽  
Alias Radam ◽  
Khalid Abdul Rahim ◽  
Amin Mahir Abdullah
Keyword(s):  
Technical Efficiency ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Agricultural Practices ◽  
Piper Nigrum ◽  
Maximum Output ◽  
Full Time ◽  
Frontier Analysis ◽  
One Step ◽  
The Mean

This study aimed to estimate the technical efficiency among pepper (Piper nigrum. L) farmers in Sarawak, Malaysia, using Stochastic Frontier Analysis (SFA). SFA involves a one-step process that can estimate technical inefficacy factors simultaneously with the production frontier. 678 pepper farmers were involved in this study, and the data were collected from 2012 to 2013. The mean score for technical efficiency was 0.518, indicating that pepper farmers were not efficient. However, the inefficiency model showed that education level, membership in farmers’ association, full-time as a pepper farmer, attending courses and visiting sample farms were factors that significantly improved inefficiency. The major problem of pepper farming in Sarawak is poor agricultural practices where farmers do not fully utilize the available agricultural inputs to produce maximum output. Based on the findings, farmers must improve their knowledge and skills in pepper farming through agronomic education.

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