Frontier Metatechnologies and Convexity: A Restatement
Kristiaan Kerstens, Christopher O’Donnell & Ignace Van de Woestyne
[email protected]
[email protected]
[email protected]
January 2015
Abstract:
This contribution reconsiders the construction of metafrontiers based on
underlying group frontiers using non-parametric technology specifications. We
argue that the large majority of articles applying this popular methodology in
fact assesses efficiency measures relative to a potentially poor approximation of
the metafrontier. We develop a refined methodology for non-parametric
specifications of technology yielding a proper non-convex metafrontier.
Furthermore, this methodology is empirically applied on a secondary data set to
verify the estimation of metatechnology ratios (as defined in O’Donnell, Rao,
and Battese (2008)) as well as to illustrate the potential bias of using the
currently established methods.
Keywords: Metafrontier, group frontier, convexity, FDH, DEA