Simar and Wilson two-stage efficiency analysis for Stata
Loading...
Date
2018
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
When analyzing what determines the efficiency of production, regressing
efficiency scores estimated by DEA on explanatory variables has much intuitive
appeal. Simar and Wilson (2007) show that this na¨ıve two-stage estimation
procedure suffers from severe flaws, that render its results, and in particular
statistical inference based on them, questionable. At the same time they propose
a statistically grounded bootstrap based two-stage estimator that eliminates the
above mentioned weaknesses of its na¨ıve predecessors and comes in two variants.
This article introduces the new Stata command simarwilson that implements
either variant of the suggested estimator in Stata. The command allows for various
options, and extends the original procedure in some respects. For instance, it
allows for analyzing both, output- and input-oriented efficiency. To demonstrate
the capabilities of the new command simarwilson we use data from the Penn
World Tables and the Global Competitiveness Report by the World Economic
Forum to perform a cross-country empirical study about the importance of quality
of governance of a country for its efficiency of output production.
Description
Table of contents
Keywords
DEA, environmental variables, bias correction, efficiency, bootstrap, truncated regression, two-stage estimation