Statistical inference for aggregates of Farrell‐type efficiencies

Abstract

Abstract 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 economic system (e.g., an industry) as a whole, or a comparison of efficiencies of distinct groups within such a system (e.g., regulated vs. non‐regulated firms or private vs. public firms). Our methodology is justified by the (neoclassical) economic theory and is supported by carefully adapted statistical methods. Copyright © 2007 John Wiley & Sons, Ltd.