GRIPS 政策研究センター Policy Research Center


2011/11/28 Report No:11-15

Underestimation of Inefficiency in Social Efficiency Benchmarking with Non- Parametric Methods of Production Technology Identification: A Note

  • Koo Ha HunAsia Pacific School of Logistics, Inha University
  • 山本 雅資富山大学
  • 吉田 雄一朗政策研究大学院大学
  • Zhang AnmingSauder School of Business, University of British Columbia
分野 経済学
言語 英語

In the conventional social productive efficiency measurement, a DEA-based non-parametric method
is typically employed to identify the piece-wise-linear production possibility frontier. Applying the
directional distance-function approach a-la Luenberger (1992) to the production possibility frontier
obtained in this fashion can, however, lead to an underestimation of inefficiency for a DMU with
relatively large undesirable outputs. This underestimation becomes more acute if the sample size is
small or data are clustered. This paper reveals the mechanism behind this underestimation bias, and
then quantifies the degree of underestimation using nine-year panel data of rail and aviation sectors in
Japan. Through a comparative analysis between parametric and non-parametric methods, we find,
among others, that the underestimation of the aviation sector’s productive inefficiency is as large as
80%, which the non-parametric method failed to detect.

添付ファイル 11-15.pdf