Oriented Stochastic Data Envelopment Models: Ranking Comparison to Stochastic Frontier Approach

CERGE-EI Working Paper No. 271

51 Pages Posted: 16 Dec 2005

See all articles by František Brázdik

František Brázdik

Czech National Bank; Charles University in Prague - CERGE-EI (Center for Economic Research and Graduate Education - Economics Institute)

Date Written: August 2005

Abstract

Results of data envelopment analysis sensitively respond to stochastic noise in the data. In this paper, by introduction of output augmentation and input reduction I extend additive models for stochastic data envelopment analysis (SDEA), which were developed by Li (1998) to handle the noise in the data. Applying the linearization procedure by Li (1998) the linearized versions of models are derived. In the empirical part of this work, the efficiency scores of Indonesian rice farms are computed. The computed scores are compared to the stochastic frontier approach scores by Druska and Horrace (2004) and weak ranking consistency with results of stochastic frontier method is observed.

Keywords: Stochastic data envelopment analysis, linear programming, efficiency, rice farm

JEL Classification: C14, C61, L23, Q12

Suggested Citation

Brázdik, František, Oriented Stochastic Data Envelopment Models: Ranking Comparison to Stochastic Frontier Approach (August 2005). CERGE-EI Working Paper No. 271. Available at SSRN: https://ssrn.com/abstract=870553 or http://dx.doi.org/10.2139/ssrn.870553

František Brázdik (Contact Author)

Czech National Bank ( email )

Na Prikope 28
CZ-11503 Praha 1
Czech Republic

Charles University in Prague - CERGE-EI (Center for Economic Research and Graduate Education - Economics Institute) ( email )

P.O. Box 882
7 Politickych veznu
Prague 1, 111 21
Czech Republic

HOME PAGE: http://www.cerge-ei.cz

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