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Efficiency Measurement

William Greene Stern School of Business New York University. Efficiency Measurement. Lab Session 3. Heterogeneity. WHO Data. Heterogeneous Frontier Command. FRONTIER [; COST] ; LHS = the variable ; RHS = ONE, the variables,

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Efficiency Measurement

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  1. William Greene Stern School of Business New York University Efficiency Measurement

  2. Lab Session 3 Heterogeneity

  3. WHO Data

  4. Heterogeneous Frontier Command FRONTIER [; COST] ; LHS = the variable ; RHS = ONE, the variables, the additional variables ; EFF = the new variable $ ε(i) = v(i) +/- u(i)

  5. Heterogeneous Frontier Model FRONTIER ; LHS = LDALE ; RHS = ONE,LHEXP,LHEXP2,LEDUC, VOICE,GEFF,LPOPDEN,TROPICS ; EFF = UI_WHO $

  6. Heteroscedasticity

  7. Effects of Environmental Variable on Efficiency ? Frontier cost function with environmental ? Variables, load factor, points served, stage ? Length. FRONTIER ; Cost ; Lhs = lc ; Rhs = one,…, loadfctr,log(points),log(stage) $ ? How does load factor affect efficiency? SIMULATE ; scenario: & loadfctr = .4(.025).95 ; plot $

  8. Efficiency Estimates|Load Factor

  9. Model Command for Heteroscedasticity

  10. Heterogeneity in the Mean of u(i)

  11. Nonparametric Frontier • Frontier with local  • Compute residuals then estimate  and  given the set of residuals from the nonparametric frontier • Compute efficiencies using residuals and  and 

  12. Parametric vs. Nonparametric

  13. Latent Class Model

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