Advanced Robust and Nonparametric Methods in Efficiency Analysis

Providing a systematic and comprehensive treatment of recent developments in efficiency analysis, this book makes available an intuitive yet rigorous presentation of advanced nonparametric and robust methods, with applications for the analysis of economies of scale and scope, trade-offs in production and service activities, and explanations of efficiency differentials.

Providing a systematic and comprehensive treatment of recent developments in efficiency analysis, this readable book makes available an intuitive yet rigorous presentation of advanced nonparametric and robust methods. This flexible toolbox can be used in theories based on the neoclassical theory of production and its alternatives, including evolutionary theories. The methods are complemented by empirical analysis of three different economic fields: scientific research, mutual funds industry and the insurance sector. The research demonstrates the utility of the toolbox for a wide range of economic issues, including the analysis of economies of scale and scope, dynamics of age and agglomeration effects, trade-offs in production and service activities, and explanations of efficiency differentials. Of interest to applied economists broadly, this book will also be of interest to those focused on Operations Research and/or Management Science.

"Léopold Simar is a pioneer. For over a decade he and a succession of talented co-authors have been addressing the shortcomings of the increasingly popular field of nonparametric frontier analysis for producer performance evaluation. The shortcomings of nonparametric frontier models include their deterministic and non-statistical nature, their sensitivity to outliers and extreme values, the absence of parameters that would enhance economic interpretation, and the lack of suitable techniques for incorporating exogenous influences on performance. This book, written with Cinzia Daraio, develops theoretical and empirical techniques for dealing with each. The problems are difficult and the analysis is advanced, but Simar and Daraio have delivered on their claim to have written a book that is both rigorous and readable. This original contribution will change the field."  -C. A. Knox Lovell

Léopold Simar is an established star in the productivity/efficiency field. He is like a fine vintage wine – a pleasure to drink today.  Cinzia Daraio is a rising star.  She is like a new wine from an established vineyard – excellent today, even better tomorrow.  Cinzia and Leopold combine forces in this book.  The result is a treat to drink, worthy of a feast. It is a sumptuous presentation of new research that embeds the nonparametric approach to efficiency measurement into a statistical framework. Enjoy"  -Harold O. Fried