Valentin Zelenyuk

The University of Queensland | UQ · School of Economics

In 1939, Econometrica published an English translation of Konüs (1924). Since then, Konüs (1924 [1939]) has become a classic work on the theory of the cost of living index , inspiring many other studies in the field. On the other hand, very few scholars have had the opportunity to read another, equally important, work by Konüs (co-authored with Byu...

The goal of this article is to give a brief overview of productivity analysis, starting with general concepts, its importance and a brief historical excursion and then focusing on various productivity indexes. We also start from very simple productivity indexes to more sophisticated, such as Malmquist Productivity Indexes, which are among the most...

We present a cohesive generalized framework for an aggregation of the Nerlovian profit indicators and of the directional distance functions, frequently used in productivity and efficiency analysis in operations research and econometrics (e.g., via data envelopment analysis or stochastic frontier analysis). Our theoretical framework allows for great...

The main goal of this paper is to clarify a few important aspects about the aggregation issues in efficiency and productivity analysis. By doing so we also sketch a brief historical map on how the area of aggregation in efficiency and productivity analysis has developed to where it is now and its connection to some classic studies in economic theor...

This study proposes a new flexible functional form for distance functions. This generalizes the existing functional form of Diewert (1992b) by allowing for α-returns to scale technology and employing the quadratic mean of order r aggregator function. Because we allow parameter α to be any strictly positive real number and r to be any non-zero real...

A simple yet easy to implement method is proposed to further improve the finite sample approximation of the recently developed central limit theorems for aggregates of envelopment estimators. Focusing on the simple mean efficiency, we propose using the bias-corrected individual efficiency estimate to improve the variance estimator. The extensive Mo...

A Comprehensive Set of Asymptotic Properties for a Meaningful Aggregation of Malmquist Indices The Malmquist productivity index (MPI) has become one of the most widely used tools for analyzing dynamic performance of decision-making units. Whereas accounting for economic weights of individual units in aggregations of indices is emphasized in the lit...

Understanding the drivers of productivity remains one of the most sought after phenomena in economics. The ability to create produce more from less resources is undoubtedly appealing. Using recently updated Penn World Table data, we investigate to what degree previous results using a popular productivity decomposition are maintained. We find that,...

This chapter provides a brief introduction to the stochastic frontier paradigm—one of the most powerful techniques for performance analysis developed over the last few decades to address various research questions for many contexts with empirical applications in a wide variety of economic sectors such as banking, healthcare, agriculture and so on....

Asymptotic statistical inference on productivity and production efficiency, using nonparametric envelopment estimators, is now available thanks to the basic central limit theorems (CLTs) developed in Kneip, Simar, and Wilson (2015). They provide asymptotic distributions of averages of Data Envelopment Analysis (DEA) and Free Disposal Hull (FDH) est...

This paper deals with the quadratic-mean-of-order-r indexes of output, input and productivity. Each index is a family of indexes that unify many of the existing indexes, including the most popular ones. We show that all index number formulae belonging to these families are superlative indexes. This is considered as a generalization of the equivalen...

In this paper, we explore the efficiency of different groups of hospitals in Queensland, Australia, focusing on teaching and non-teaching hospitals, by adapting the most recent developments on statistical analysis of aggregate efficiency. We focus on the two approaches: the bootstrap approach proposed by Simar and Zelenyuk (J Appl Econ 22(7):1367–1...

Despite the long and great history, developed institutions, and high level of physical and human capital, the Italian economy has been fairly stagnant during the last three decades. In this paper, we merge two streams of literature: nonparametric methods to estimate frontier efficiency of an economy, which allows us to develop a new measure of outp...

In this study, we utilize various approaches for efficiency analysis to explore the state of efficiency of public hospitals in Queensland, Australia, in the year 2016/17. Besides the traditional nonparametric approaches like DEA and FDH, we also use a more recent and very promising robust approach–order-α quantile frontier estimators (Aragon et al....

Data envelopment analysis (DEA) has been widely recognised as a powerful tool for performance analysis over the last four decades. The application of DEA in empirical works, however, has become more challenging, especially in the modern era of big data, due to the so-called ‘curse of dimensionality’. Dimension reduction has been recently considered...

The goal of this paper is to investigate the question of the importance of aggregation of the Paasche and Laspeyres versions of the Malmquist quantity and productivity indexes from both theoretical and empirical perspectives. We discuss the existing justification and provide an alternative theoretical justification based on results from the functio...

In data envelopment analysis (DEA), the curse of dimensionality problem may jeopardize the accuracy or even the relevance of results when there is a relatively large dimension of inputs and outputs, even for relatively large samples. Recently, a machine learning approach based on the least absolute shrinkage and selection operator (LASSO) for varia...

We consider a new class of Data Envelopment Analysis (DEA) modeling, which we call ‘sequential DEA’. This new approach is a relatively simple generalization of the standard and popular in practice DEA. It allows for analyzing efficiency of the decision making units that consist of a sequence of sub-DMUs (e.g., branches of banks, hospital holding co...

We propose an improvement of the finite sample approximation of the central limit theorems (CLTs) that were recently derived for statistics involving production efficiency scores estimated via Data Envelopment Analysis (DEA) or Free Disposal Hull (FDH) approaches. The improvement is very easy to implement since it involves a simple correction of th...

We present new theoretical results, showing that Nerlovian profit efficiency is a special case of the recently introduced general profit efficiency, deriving a new decomposition of profit efficiency, and outlining a simple way of estimating the generalized profit efficiency measure.

We analyse two popular notions in production theory: the notion of Hicks neutral technical change and the notion of homothetic technology. Both of these notions are characterized by the radial expansions or contractions of the relevant isoquants, yet in different ways. In the case of multiple-input and multiple-output, an isoquant is characterized...

In this work, we first replicate the results of the fully parametric dynamic probit model for forecasting US recessions from Kauppi and Saikkonen (Rev Econ Stat 90(4):777–791, 2008) [which is in the spirit of Estrella and Mishkin (Rev Econ Stat 80(1):45–61, 1998) and Dueker (Rev Fed Reserve Bank St Louis 79(2):41–51, 1997)] and then contrast them t...

A recent spate of research has attempted to develop estimators for stochastic frontier models that embrace semi- and nonparametric insights to enjoy the advantages inherent in the more traditional operations research method of data envelopment analysis. These newer methods explicitly allow statistical noise in the model, the absence of which is a c...

The main goal of this paper is to explore the possible solutions to a ‘big data’ problem related to the very large dimensions of input–output data. In particular, we focus on the cases of severe ‘curse of dimensionality’ problem that require dimension-reduction prior to using Data Envelopment Analysis. To achieve this goal, we have presented some t...

Methods and perspectives to model and measure productivity and efficiency have made a number of important advances in the last decade. Using the standard and innovative formulations of the theory and practice of efficiency and productivity measurement, Robin C. Sickles and Valentin Zelenyuk provide a comprehensive approach to productivity and effic...

Cambridge Core - Optimisation - Measurement of Productivity and Efficiency - by Robin C. Sickles

Measurement of Productivity and Efficiency - by Robin C. Sickles March 2019

Measurement of Productivity and Efficiency - by Robin C. Sickles March 2019

Measurement of Productivity and Efficiency - by Robin C. Sickles March 2019

Measurement of Productivity and Efficiency - by Robin C. Sickles March 2019

Measurement of Productivity and Efficiency - by Robin C. Sickles March 2019

Measurement of Productivity and Efficiency - by Robin C. Sickles March 2019

Measurement of Productivity and Efficiency - by Robin C. Sickles March 2019

Measurement of Productivity and Efficiency - by Robin C. Sickles March 2019

Measurement of Productivity and Efficiency - by Robin C. Sickles March 2019

Measurement of Productivity and Efficiency - by Robin C. Sickles March 2019

Measurement of Productivity and Efficiency - by Robin C. Sickles March 2019

Measurement of Productivity and Efficiency - by Robin C. Sickles March 2019

Measurement of Productivity and Efficiency - by Robin C. Sickles March 2019

One of the most popular approaches in the theoretical measurement and empirical estimation of the efficiency of various economic systems is known as Data Envelopment Analysis, abbreviated as DEA. This approach is rooted in and cohesive with theoretical economic modeling via the so-called Activity Analysis Models and is estimated via the powerful li...

Measurement of Productivity and Efficiency - by Robin C. Sickles March 2019

Measurement of Productivity and Efficiency - by Robin C. Sickles March 2019

Measurement of Productivity and Efficiency - by Robin C. Sickles March 2019

Measurement of Productivity and Efficiency - by Robin C. Sickles March 2019

Measurement of Productivity and Efficiency - by Robin C. Sickles March 2019

Measurement of Productivity and Efficiency - by Robin C. Sickles March 2019

Measurement of Productivity and Efficiency - by Robin C. Sickles March 2019

In this paper we consider justifications for the equally-weighted arithmetic averaging for the Luenberger indicators with respect to two different references, introduced in Chambers (2002).

Measuring profit efficiency is a challenging task, and many different approaches have been suggested. This paper synthesizes existing approaches and develops a general Farrell-type approach of the profit efficiency measurement. Our derivations unveil new and useful relationships between existing measures and the proposed new Farrell-type measures....

Our chapter details a wide variety of approaches used in estimating productivity and efficiency based on methods developed to estimate frontier production using stochastic frontier analysis (SFA) and data envelopment analysis (DEA). The estimators utilize panel, single cross section, and time series data sets. The R programs include such approaches...

Adequate modeling of undesirable outputs in production processes plays an important role in management practice. Nonparametric models that assume jointly weak disposability of desirable and undesirable outputs have become prevalent in the literature although a consensus on how to implement this axiom has not been reached yet. Particularly, there is...

In this paper we extend the slack-based directional distance function introduced by Färe and Grosskopf (Eur J Oper Res 200(1):320–322, 2010) to measure efficiency in the presence of bad outputs and illustrate it through an application on data of Vietnamese commercial banks. We also compare results from the slack-based directional distance function...

Applied researchers in the field of efficiency and productivity analysis often need to estimate and make inference about aggregate efficiency, such as industry efficiency or aggregate efficiency of a group of distinct firms within an industry (e.g., public versus private firms, regulated versus unregulated firms, etc.). While there are approaches t...

We investigate the impact of earning asset diversification on Chinese bank efficiency from 2006 to 2011. We do this by adapting the current two-stage data envelopment analysis approach to a panel data setting so that we can account for technology change over time. Our Monte Carlo experiments illustrate the advantages and disadvantages of the propos...

When analyzing productivity and efficiency of firms, stochastic frontier models are very attractive because they allow, as in typical regression models, to introduce some noise in the Data Generating Process . Most of the approaches so far have been using very restrictive fully parametric specified models, both for the frontier function and for the...

Adopting a profit-based approach to the estimation of the technical efficiency of South Korean banks, we systematically analyse, within a non-parametric DEA analysis, how the choice of risk management control variable impacts upon such estimates. Using the model of Liu et al. (2010), we examine the dependency of the estimated technical efficiency s...

The non-parametric quasi-likelihood method is generalized to the context of discrete choice models for time series data, where the dynamic aspect is modeled via lags of the discrete dependent variable appearing among regressors. Consistency and asymptotic normality of the estimator for such models in the general case is derived under the assumption...

In this work, we analyze production performance of hospital services in Ontario (Canada), by investigating its key determinants. Using data for the years 2003 and 2006, we follow the two-stage approach of Simar and Wilson (2007) [76]. Specifically, we use Data Envelopment Analysis (DEA) at the first stage to estimate efficiency scores and then use...

This paper develops two cost decompositions based on the multiplicative Russell and additive slack-based (in)efficiency measurement frameworks. While the multiplicative cost decomposition is a straightforward extension of the standard cost decomposition, the decomposition we develop in this paper incorporates slacks directly so that efficiency is m...

Diversified and focused business models may affect foreign bank efficiency differently. We investigate whether there is an optimal business model along three business dimensions—assets, funding and income—and which business model is optimal for foreign banks in a financial center. We apply recently developed non-parametric methods with bootstrap to...

This paper develops a slack-based decomposition of profit efficiency based on a directional distance function. It is an alternative to Cooper, Pastor, Aparicio and Borras (2011).

In this paper we consider estimation of models popular in efficiency and productivity analysis (such as the stochastic frontier model, truncated regression model, etc.) via the local maximum likelihood method, generalizing this method here to allow for not only continuous but also discrete regressors. We provide asymptotic theory, some evidence fro...

In this article, we revisit a recent work on pricing decision-making units by Färe et al (2013) and extend it to allow for non-constant returns to scale technologies.

Various distance functions, defined as different optimization problems with respect to a technology set, are frequently used to characterize technology in theoretical economics as well as in efficiency and productivity analysis. In this study we establish a new relationship between the Shephard's input and output distance functions and the directio...

In this paper we consider aggregate Malmquist productivity index measures which allow inputs to be reallocated within the group (when in output orientation). This merges the single period aggregation results allowing input reallocation of Nesterenko and Zelenyuk (2007) with the aggregate Malmquist productivity index results of Zelenyuk (2006) to de...

We address the issue of equivalence of primal and dual measures of scale efficiency in general production theory framework. We find that particular types of homotheticity of technologies, which we refer to here as scale homotheticity, provide necessary and sufficient condition for such equivalence. We also identify the case when the scale homotheti...

The nonparametric smoothing technique with mixed discrete and continuous regressors is considered. It is generally admitted that it is better to smooth the discrete variables, which is similar to the smoothing technique for continuous regressors but using discrete kernels. However, such an approach might lead to a potential problem which is linked...

In this paper we compare productivity, efficiency and technological changes with and without case-mix as output categories using panel data on Ontario hospitals for the period 2002–2006. We use the Malmquist Productivity Index (MPI), Data Envelopment Analysis (DEA), and non-parametric density estimation and related statistical tests. We also decomp...

The banking sector plays a major role in any economy, and it played a critical role in transition of Ukraine to a market economy. In this work, we investigate the hypothesis that, despite the tremendous growth and apparent prosperity that existed before the country was hit by the global financial crisis, the Ukrainian banking industry already suffe...

In this paper we focus on scale elasticity measure based on directional distance function for multi-output–multi-input technologies, explore its fundamental properties and show its equivalence with the input oriented and output oriented scale elasticity measures. We also establish duality relationship between the scale elasticity measure based on t...

This paper investigates the effects of home country banking regulations on the performance of foreign banks in Luxembourg’s financial center. We control for the main regulatory indicators, such as capital requirements, private monitoring, official disciplinary power and restrictions on bank activities, accounting for the regulatory regime applied t...

In this paper we propose new aggregate or ‘group’ primal and dual scale elasticity measures of an economic system (e.g., industry consisting of several firms, etc.). The main contribution of the paper is that we show under what assumptions a formal relationship between these new aggregate scale elasticity measures and the individual scale elasticit...

In this article we generalize the aggregation theory in efficiency and productivity analysis by deriving solutions to the problem of aggregation of individual scale efficiency measures, primal and dual, into aggregate primal and dual scale efficiency measures of a group (e.g., industry). The new aggregation result is coherent with aggregation frame...

In this study, we explore the pattern of efficiency among enterprises in China’s 29 provinces across different ownership types in heavy and light industries and across different regions (coastal, central and western). We do so by performing a bootstrap-based analysis of group efficiencies (weighted and non-weighted), estimating and comparing densit...

Presumably, foreign banks open subsidiaries and branches in Luxembourg to perform different tasks. This paper studies the balance sheet structure of banks in Luxembourg, testing for differences across groups and across periods. Non-parametric methods yield several findings. First, specialisation and heterogeneity vary across years as well as across...

In this paper we consider the question of measuring aggregate economic growth and its sources. We derive a theoretically justified solution for aggregating (across firms, industries, countries, etc.) growth rates and their sources within the framework of Solow’s (1957) growth accounting method. The resulting aggregation scheme turns out to be quite...

In this paper we introduce a scale elasticity measure based on directional distance function for multi-output-multi-input technologies and explore its fundamental properties. Specifically, we derive necessary and sufficient condition for equivalence of the scale elasticity measure based on the directional distance function with the input oriented a...

In a seminal paper, Racine and Li, (Journal of Econometrics, 2004) introduce a tool which admits discrete and categorical variables as regressors in nonparametric regres- sions. The method is similar to the smoothing techniques for continuous regressors but uses discrete kernels. In the literature, it is generally admitted that it is always better...

The last two decades have witnessed a revival in interest in the measurement of productive efficiency pioneered by (1957) and (1951). 1978 was a watershed year in this revival with the christening of DEA by (1978) and the critique of Farrell technical efficiency in terms of axiomatic production and index number theory in Fare and (1978). These pape...

This is an action program for the first year of a new presidency. After the presidential elections, Ukraine will have a unique opportunity to implement reforms that will lay foundation for sustainable economic growth. The new presidential mandate, the shock of a recent severe economic crisis, and popular dissatisfaction with the status-quo create i...

Purpose The purpose of this paper is to present a productivity measure for hospital services in Ontario. Design/methodology/approach The study applied the Malmquist Productivity Index (MPI) to assess the efficiency of hospital services in Ontario, Canada, over the period 2003‐2006. The MPI was decomposed into efficiency change and technological ch...

This paper performs comparative analysis of the non-radial Russell output technical efficiency measures of 13 Eastern European banking systems assuming a banking production with risk as an undesirable output and where output components can be negative. This is analysed utilizing three modelling specifications; the intermediation, production and pro...

In this note we investigate the power of significance test for dummy variables in the context of Simar and Wilson (2007) two-stage efficiency analysis model.

In this paper we synthesize and adopt the recently developed methods in efficiency analysis to the case of comparison of regions within a country. We take Ukrainian regions as a subject of investigation, yet the same toolkit can be applied to test disputable differences in productivity for many other countries where such questions can be of nationa...

In this paper we propose a very flexible estimator in the context of truncated regression that does not require parametric assumptions. To do this, we adapt the theory of local maximum likelihood estimation. We provide the asymptotic results and illustrate the performance of our estimator on simulated and real data sets. Our estimator performs as w...

This note shows that the Nerlovian profit indicator may be aggregated over firms into an industry measure of profit efficiency. The note also provides conditions under which the technical component of the indicator may also be aggregated.

In this paper we use the Kumar and Russell ["American Economic Review" (2002) Vol. 92, pp. 527-548] growth-accounting procedure to examine cross-country growth during the 1990s. Using a data set comprising developed, newly industrialized, developing and transitional economies, we decompose the growth of output per worker into components attributabl...

The relationship between the quality of political institutions and the performance of regulation has recently assumed greater prominence in the policy debate on the effectiveness of infrastructure industry reforms. Taking the view that political accountability is a key factor linking political and regulatory structures and processes, this article e...

In this study, we merge results of two recent directions in efficiency analysis research-aggregation and bootstrap-applied, as an example, to one of the most popular point estimators of individual efficiency: the data envelopment analysis (DEA) estimator. A natural context of the methodology developed here is a study of efficiency of a particular e...