Sensitivity of directional technical inefficiency measures to the choice of the direction vector: a simulation study

• Type: Article in International Scientific Journal
• Date: 2017

Authors

Macedo, P (Author) Other; Elvira Silva (Author) FEP

Journal

Title: Economics Bulletin

Vol. 37 No. 1

Pages: 52-+

ISSN: 1545-2921

Publisher: Economics Bulletin

Indexing

ISI Web of Knowledge - 0 Citations

Scopus - 0 Citations

Other information

Authenticus ID: P-00M-EVK

Abstract (EN): The purpose of this note is to provide new insights on the sensitivity of technical inefficiency scores, estimated using a directional distance function with small samples and the presence of outliers, to the choice of the direction vector. A simulation study with a geometric illustration is conducted considering several direction vectors. To the best of authors' knowledge, this is the first simulation work comparing 16 direction vectors, some of which are often employed in empirical studies. The four directional vectors that consistently provide the best results are identified and used in the empirical application discussed in this study.

Language: English

Type (Professor's evaluation): Scientific

No. of pages: 12