Skip to main content
Log in

Hypothesis tests using data envelopment analysis

  • Published:
Journal of Productivity Analysis Aims and scope Submit manuscript

Abstract

A substantial body of recent work has opened the way to exploring the statistical properties of DEA estimators of production frontiers and related efficiency measures. The purpose of this paper is to survey several possibilities that have been pursued, and to present them in a unified framework. These include the development of statistics to test hypotheses about the characteristics of the production frontier, such as returns to scale, input substitutability, and model specification, and also about variation in efficiencies relative to the production frontier.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Similar content being viewed by others

References

  • Aigner, D.J. and S.F. Chu. (1968). “On Estimating the Industry Production Function.” American Economic Review 826–839.

  • Aigner, D.J., C.A.K. Lovell, and P. Schmidt. (1977). “Formulation and Estimation of Stochastic Frontier Production Function Models.” Journal of Econometrics, July, 21–37.

  • Banker, R.D. (1989). “Econometric Estimation and Data Envelopment Analysis.” Research in Governmental and Nonprofit Accounting, 231–244.

  • Banker, R.D. (1992). “Selection of Efficiency Evaluation Models.” Contemporary Accounting Research Fall 343–355.

  • Banker, R.D. (1993). “Maximum Likelihood, Consistency and Data Envelopment Analysis: A Statistical Foundation.” Management Science, Oct. 1265–1273.

  • Banker, R.D. and H. Chang. (1993). “Tests of Returns to Scale for Monotone Concave Production Functions”

  • Banker, R.D. and H. Chang. (1994). “A Monte Carlo Evaluation of Hypothesis Tests for Differences in Efficiencies.” International Journal of Production Economics.

  • Banker, R.D. and H. Chang. (1995). “A Simulation Study of Hypothesis Tests for Differences in Efficiencies for the Case of Multiple Outputs and Measurement Error.” 1995.

  • Banker, R.D., H. Chang, and K.K. Sinha. (1994). “Tests to Evaluate the Separability or Substitutability of Inputs to a Production System.”

  • Banker, R.D., A. Charnes, and W.W. Cooper. (1984). “Models for the Estimation of Technical and Scale Inefficiencies in Data Envelopment Analysis.” Management Science Sept. 1078–1092.

  • Banker, R.D., A. Charnes, W.W. Cooper, and A. Maindiratta. (1987). “A Comparison of Data Envelopment Analysis and Translog Estimates of Production Frontiers Using Simulated Observations from a known Technology.” In A. Dogramaci and R. Färe(eds.), Applications of Modern Production Theory in Efficiency and Productivity. Boston: Kluwer Academic Publishers.

    Google Scholar 

  • Banker, R.D., R. Conrad, and R. Strauss. (1986). “A Comparative Application of Data Envelopment Analysis and Translog Methods: An Illustrative Study of Hospital Production,” Management Science Jan. 31–44.

  • Banker, R.D., S. Devaraj, and K.K. Sinha. (1995). “Some Tests of Model Specification in Data Envelopment Analysis.”

  • Banker, R.D., V. Gadh, and W. Gorr. (1993). “A Monte Carlo Comparison of Two Production Frontier Estimation Methods: Corrected Ordinary Least Squares and Data Envelopment Analysis.” European Journal of Operational Research 332–343.

  • Banker, R.D. and H.H. Johnston. (1995). “Evaluating the Impacts of Operating Strategoes on Efficiency in the U.S. Airline Industry.” In A. Charnes, W.W. Cooper, A. Lewin, and L. Seiford (eds.), Data Envelopment Analysis: Theory, Methodology and Applications, Boston: Kluwer Academic Publishers.

    Google Scholar 

  • Banker, R.D. and A. Maindiratta. (1986). “Piecewise Loglinear Estimation of Efficient Production Surfaces.” Management Science Jan. 126–135.

  • Banker, R.D. and A. Maindiratta. (1988). “Nonparametric Analysis of Technical and Allocative Efficiencies in Production.” Econometrica 1315–1332.

  • Banker, R.D. and R.C. Morey. (1986). “Efficiency Analysis for Exogenously Fixed Inputs and Outputs.” Operations Research July/Aug. 513–521.

  • Berndt, E. and D. Wood. (1975). “Technology, Prices and the Derived Demand for Energy.” Review of Economics and Statistics 259–268.

  • Charnes, A., W.W. Cooper, and E. Rhodes. (1978). “Measuring the Efficiency of Decision Making Units.” European Journal of Operational Research, 429–444.

  • Charnes, A., W.W. Cooper, and E. Rhodes. (1981). “Program Evaluation and Managerial Efficiency: An Application of Data Envelopment Analysis to Program Follow Through.” Management Science 668–697.

  • Färe, R., S. Grosskopf, and C.A.K. Lovell. (1985). The Measurement of Efficiency of Production. Boston: Kluwer-Nijhoff.

    Google Scholar 

  • Forsund, F., C.A.K. Lovell, and P. Schmidt. (1980). “A Survey of Frontier Production Functions and of Their Relationship to Efficiency Measurement.” Journal of Econometrics 5–25.

  • Gong, B. and R.C. Sickles. (1992). “Finite Sample Evidence on the Performance of Stochastic Frontiers and Data Envelopment Analysis Using Panel Data.” Journal of Econometrics 259–284.

  • Greene, W.H. (1980). “Maximum Likelihood Estimation of Econometric Frontier Functions,” Journal of Econometrics 27–56.

  • Grosskopf, S. and V. Valdmanis. (1987). “Measuring Hospital Performance: A Nonparametric Approach.” Journal of Health Economics 89–107.

  • Gstach, D. (1995). “Efficiency of Austrian Combined Transport: Application of DEA in a Statistical Setting.”

  • Kitteisen, S.A.C. (1995). “Monte Carlo Simulations of DEA Efficiency Measures and Hypothesis Tests.”

  • Korostelev, A.P., L. Simar, and A.B. Tsybakov. (1995). “On Estimation of Monotone and Convex Boundaries.” Public Institute of Statistics of University of Paris. pp. 3–18.

  • Meeusen, W. and J. van den Broeck. (1977). “Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error.” International Economic Review June 435–444.

  • Mensah, Y.M. and S. Li. (1993). “Measuring Production Efficiency in a Not-for-Profit Setting: An Extension.” The Accounting Review Jan. 66–88.

  • Olson, J.A., P. Schmidt, and D.A. Waldman. (1980). “A Monte Carlo Study of Estimators of Stochastic Frontier Production Functions.” Journal of Econometrics 67–82.

  • Schmidt, P. (1976). “On the Statistical Estimation of Parametric Frontier Production Functions.” Review of Economics and Statistics, May 238–339.

  • Schmidt, P. (1985). “Frontier Production Functions.” Econometric Review, 289–328.

  • Shephard, R.W.(1970). Theory of Cost and Production Functions. Princeton, NJ: Princeton University Press.

    Google Scholar 

  • Siegel, S. and N J. Castellan Jr.(1988). Nonparametric Statistics for the Behavioral Sciences. New York: McGraw-Hill.

    Google Scholar 

  • Theil, Henri. (1971). Principles of Econometrics. New York: John Wiley & Sons, Inc.

    Google Scholar 

  • Varian, H.R. (1978). “The Nonparametric Approach to Production Analysis.” Econometrica, 579–597.

Download references

Author information

Authors and Affiliations

Authors

Rights and permissions

Reprints and permissions

About this article

Cite this article

Banker, R.D. Hypothesis tests using data envelopment analysis. J Prod Anal 7, 139–159 (1996). https://doi.org/10.1007/BF00157038

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1007/BF00157038

Keywords

Navigation