Title: Addressing the endogeneity issue in DEA applications
Speaker: Gabriela Sicilia
Date: 27/07/2016 12:00 h
Location: Sala de Seminarios, Edificio Torretamarit
Abstract:
The presence of the endogeneity is frequently observed in several economic production processes, however, it has received little attention in the frontier literature and it is overlooked when practitioners apply data envelopment analysis (DEA). Recently, Cordero, Santín and Sicilia (2015) concluded that when one input in the production process is highly and positively correlated with the true efficiency level, endogeneity arises and DEA estimates are flawed. In addition, they find that this decline in DEA performance is further driven by the misidentification of the most inefficient DMUs with low levels of the endogenous input. These findings take on greater significance since high positive endogenous scenarios are similar to those that are likely to be found in many production processes. In this context, the estimation of the technical efficiency using DEA models without taking into account the presence of endogeneity leads to inaccurate efficiency estimates where many of the most inefficient DMUs are identified as benchmarks, which will lead to inappropriate performance-based recommendations. Building upon this evidence, in this research we address two key issues: how can we detect the presence of an endogenous input? And, how can we deal with this problem in DEA empirical applications to overcome this problem and improve estimations? First, we provide a simple heuristic procedure which allows practitioners to identify the presence of an endogenous input in an empirical research. Second, we propose the use of an instrumental input DEA (II-DEA) as a potential solution to deal with the endogeneity problem in order to improve DEA estimations. Monte Carlo results confirm that II-DEA approach outperforms standard DEA when an input has a high a positive correlation with the technical efficiency. Finally, we perform an empirical application to illustrate our theoretical findings.
Brief Bio:
Ph.D. in Economics at Complutense University of Madrid (2015). Her main lines of research are the measurement of efficiency and productivity and causal inference applied to the field of education, combining both methodological and applied elements. Her work has led to several publications in scientific international journals such as the European Journal of Operational Research, Scientometrics, Pacific Economic Review, Latin American Economic Review and The Social Science Journal and have been discusssed in more than 20 national and international conferences and workshops. She has also participated in several competitive research projects and is a regular contributor to the European Foundation Society and Education.
Title: Managerial and Program Inefficiency for European Meat Manufacturing Firms: A Dynamic Multidirectional Inefficiency Analysis Approach
Speaker: Magdalena Kapelko
Date: 13/07/2016 12:00h
Location: Sala de Seminarios, Edificio Torretamarit
Abstract:
This paper proposes a dynamic multidirectional inefficiency analysis approach within the context of Data Envelopment Analysis to measuring input- and investment-specific managerial and program inefficiency for groups of firms characterized by different technologies. Dynamic managerial inefficiency refers to the distance to the firms’ group-specific frontier of best practices, and dynamic program inefficiency measures the difference between the group-specific frontier and the pooled frontier. The empirical application focuses on panel data of large meat processing firms in Eastern, Western and Southern Europe over the period 2015-2012. The results show that Eastern European firms have the highest dynamic managerial inefficiency for all inputs, but have the smallest values for dynamic program inefficiency. Western European firms perform worst in terms of program inefficiency for all inputs, while Southern European firms score highest for dynamic managerial inefficiency. The results also reveal that regardless the dynamic inefficiency dimension considered, investments is the most inefficient input, followed by labor, and materials.
Brief Bio:
Magdalena Kapelko is an Assistant Professor at Wroclaw University of Economics in Poland. She was a Visiting Assistant Professor at Universidad Carlos III de Madrid and Visiting Researcher at Wageningen University in the Netherlands, Universidad Miguel Hernandez in Spain, University of Florida in the USA, and Linnaeus University in Sweden. She received a PhD and MPhil from Universitat Autònoma de Barcelona in Spain, and a MSc from Wroclaw University of Technology in Poland. Her research specialization is in the area of efficiency and productivity analysis, applied to different business sectors.
Title: Generalized Transport Costs, Accessibility Gains, and Road Transport Infrastructure in Spain
Speaker: Jose Luis Zofío
Date: 06/07/2016 12:00h
Location: Sala de Seminarios, Edificio Torretamarit
Abstract:
Accessibility, the relative access to markets, is a strategic concept in all economic models with a spatial dimension and its prominence has been acknowledged in many economic research fields and policy debates. This paper is based on the assumption that infrastructure, through generalized transport costs between locations, drives economic accessibility and, therefore, we can assimilate a production function approach where the road network constitutes a set of inputs yielding access to markets as output.
Methodologically, we originally measure the infrastructure inputs accounting for the real used network and calculate a series of new final and intermediate demand gravity-based and locational indicators, which capture a wide range of economic transactions and represent different concepts of economic accessibility outputs. The value added of this paper is translating a non-parametric frontier approach (DEA) to a dynamic scope (Malmquist indices) by connecting the regional accessibility to the productivity of the road infrastructure inputs associated with each region. Results during 1995–2005 show a low relative accessibility of the Spanish NUTS-3 regions, although improvements have been greater over the last five years. Finally, we observe a U-inverted relationship between the accessibility gains during these years and the geographical localization.
Brief Bio:
José L. Zofío is Professor of Economics since 2014. He received his PhD in Economics from Universidad Autónoma de Madrid in 2000. His research fields of interest are Productivity and Efficiency (Stochastic Frontier Analysis and Data Envelopment Analysis), Spatial Economics (New Trade Theory and New Economic Geography), Industrial Organization (Competition Policy and Regulation), Environmental Economics and Copyright Industries. He has published many articles in international journals, led relevant research projects, and supervised several dissertations related to the above fields. A list of his most relevant publications can be found in IDEAS (https://ideas.repec.org/e/pzo21.html) and Google Scholar.
