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Nonparametric Technical Efficiency with K Firms, N Inputs, and M Outputs: A Simulation

Published online by Cambridge University Press:  15 September 2016

Loren W. Tauer  and
John J. Hanchar
Loren W. Tauer
Affiliation:
Department of Agricultural, Resource, and Managerial Economics, Cornell University
John J. Hanchar
Affiliation:
Department of Agricultural, Resource, and Managerial Economics, Cornell University
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Abstract

Monte-Carlo simulation of nonparametric efficiency shows that even when the number of firms is large, defining ten or more inputs results in most firms being measured as efficient. Comparison of the simulated results with any empirical results may suggest that the dimension of the problem, rather than actual efficiencies, determines computed efficiencies.

Type
Articles
Information
Agricultural and Resource Economics Review , Volume 24 , Issue 2 , October 1995 , pp. 185 - 189
Copyright
Copyright © 1995 Northeastern Agricultural and Resource Economics Association 

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