Non-Parametric Tests for Firm Efficiency in Case of Errors-in-Variables
16 Pages Posted: 26 Aug 2006
Date Written: December 2001 2,
This paper develops a novel statistic for firm efficiency called efficiency depth that allows for statistical inference in case of errors-in-variables. We derive statistical tests that require minimal statistical assumptions; neither the sample distribution nor the noise level is required. An empirical illustration for European banks illustrates that - despite the minimal assumptions- the tests can have substantial discriminating power in practical applications.
Keywords: firm efficiency, nonparametric analysis, errors-in-variables
JEL Classification: M, G30, C40
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