Double Bootstrap Confidence Intervals in the Two‐Stage DEA Approach

10 Pages Posted: 28 Jul 2015

See all articles by Dimitris K. Chronopoulos

Dimitris K. Chronopoulos

University of St. Andrews - School of Management

Claudia Girardone

University of Essex - Essex Business School

John C. Nankervis

University of Essex - Department of Accounting, Finance & Management

Multiple version iconThere are 2 versions of this paper

Date Written: September 2015

Abstract

Contextual factors usually assume an important role in determining firms' productive efficiencies. Nevertheless, identifying them in a regression framework might be complicated. The problem arises from the efficiencies being correlated with each other when estimated by Data Envelopment Analysis, rendering standard inference methods invalid. Simar and Wilson (2007) suggest the use of bootstrap algorithms that allow for valid statistical inference in this context. This article extends their work by proposing a double bootstrap algorithm for obtaining confidence intervals with improved coverage probabilities. Moreover, acknowledging the computational burden associated with iterated bootstrap procedures, we provide an algorithm based on deterministic stopping rules, which is less computationally demanding. Monte Carlo evidence shows considerable improvement in the coverage probabilities after iterating the bootstrap procedure. The results also suggest that percentile confidence intervals perform better than their basic counterpart.

Keywords: Data envelopment analysis, double bootstrap, confidence intervals, stopping rules, two‐stage approach, JELC14

JEL Classification: C15, C24, G21

Suggested Citation

Chronopoulos, Dimitris K. and Girardone, Claudia and Nankervis, John C., Double Bootstrap Confidence Intervals in the Two‐Stage DEA Approach (September 2015). Journal of Time Series Analysis, Vol. 36, Issue 5, pp. 653-662, 2015. Available at SSRN: https://ssrn.com/abstract=2636577 or http://dx.doi.org/10.1111/jtsa.12122

Dimitris K. Chronopoulos (Contact Author)

University of St. Andrews - School of Management ( email )

The Gateway
North Haugh
St. Andrews, Fife, Scotland KY16 9SS
United Kingdom

Claudia Girardone

University of Essex - Essex Business School ( email )

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom
+44 1206874156 (Phone)
+44 1206873429 (Fax)

HOME PAGE: http://www.essex.ac.uk/ebs/staff/profile.aspx?ID=1045

John C. Nankervis

University of Essex - Department of Accounting, Finance & Management ( email )

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom

Register to save articles to
your library

Register

Paper statistics

Downloads
0
Abstract Views
223
PlumX Metrics