Measuring technical efficiency and total factor productivity change with undesirable outputs in Stata. (March 2022)

• Record Type: Journal Article
• Authors: Wang, Daoping; Du, Kerui; Zhang, Ning
• Is Part Of: Stata journal. Volume 22:Number 1(2022)
• Page Start: 103
• Page End: 124
• Publication Date: 2022-03
• Subjects: st0665 -- teddf -- gtfpch -- data envelopment analysis -- dea -- Malmquist– Luenberger index -- Luenberger indicator -- directional distance function -- total factor productivity -- radial Debreu–Farrell -- nonradial Russell measures; Statistics -- Periodicals; Statistics -- Computer programs -- Periodicals; 001.422
• DOI: 10.1177/1536867X221083886
• Languages: English
• ISSNs: 1536-867X

Abstract

In this article, we introduce two community-contributed data envelopment analysis commands for measuring technical efficiency and productivity change in Stata. Over the last decades, an important theoretical progression of data envelopment analysis, a nonparametric method widely used to assess the performance of decision-making units, is the incorporation of undesirable outputs. Models able to deal with undesirable outputs have been developed and applied in empirical studies for assessing the sustainability of decision-making units. These models are getting more and more attention from researchers and managers. Theteddf command discussed in the present article allows users to measure technical efficiency, both radial and nonradial, when some outputs are undesirable. Technical efficiency measures are obtained by solving linear programming problems. Thegtfpch command we also describe here provides tools for measuring productivity change, for example, the Malmquist–Luenberger index and the Luenberger indicator. We provide a brief overview of the nonparametric efficiency and productivity change measurement accounting for undesirable outputs, and we describe the syntax and options of the new commands. We also illustrate with examples how to perform the technical efficiency and productivity analysis with the newly introduced commands.