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https://doi.org/10.2139/ssrn.4...
Article . 2024 . Peer-reviewed
Data sources: Crossref
https://dx.doi.org/10.48550/ar...
Article . 2024
License: CC BY
Data sources: Datacite
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Robust Nonparametric Stochastic Frontier Analysis

Authors: Zheng, Peng; Worku, Nahom; Bannick, Marlena; Dielemann, Joseph; Weaver, Marcia; Murray, Christopher; Aravkin, Aleksandr;

Robust Nonparametric Stochastic Frontier Analysis

Abstract

Benchmarking tools, including stochastic frontier analysis (SFA), data envelopment analysis (DEA), and its stochastic extension (StoNED) are core tools in economics used to estimate an efficiency envelope and production inefficiencies from data. The problem appears in a wide range of fields -- for example, in global health the frontier can quantify efficiency of interventions and funding of health initiatives. Despite their wide use, classic benchmarking approaches have key limitations that preclude even wider applicability. Here we propose a robust non-parametric stochastic frontier meta-analysis (SFMA) approach that fills these gaps. First, we use flexible basis splines and shape constraints to model the frontier function, so specifying a functional form of the frontier as in classic SFA is no longer necessary. Second, the user can specify relative errors on input datapoints, enabling population-level analyses. Third, we develop a likelihood-based trimming strategy to robustify the approach to outliers, which otherwise break available benchmarking methods. We provide a custom optimization algorithm for fast and reliable performance. We implement the approach and algorithm in an open source Python package `sfma'. Synthetic and real examples show the new capabilities of the method, and are used to compare SFMA to state of the art benchmarking packages that implement DEA, SFA, and StoNED.

42 pages, 9 figures

Related Organizations
Keywords

Methodology (stat.ME), FOS: Computer and information sciences, Optimization and Control (math.OC), 65K10, 62P20, FOS: Mathematics, Mathematics - Optimization and Control, Statistics - Methodology

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
2
Top 10%
Average
Average
Green