Essays on Efficiency Analysis

This dissertation consists of four essays which investigate efficiency analysis, especiallywhen non-discretionary inputs exist. A new approach of the multi-stage Data EnvelopmentAnalysis (DEA) for non-discretionary inputs, statistical inference discussions, andapplications are provided. In the first essay, I propose a multi-stage DEA model to addressthe non-discretionary input issue, and provide a simulation analysis that illustrates theimplementation and potential advantages of the new approach relative to the leading existingmulti-stage models of non-discretionary inputs, such as Ruggiero's 1998 model and Fried,Lovell, Schmidt, and Yaisawarng's 2002 model. Furthermore, the simulation results alsosuggest that the constant returns to scale assumption seems to be preferred whenobservations have similar sizes, but variable returns to scale may be more appropriate whentheir scales are different. In the second essay, I make comments on Simar and Wilson workof 2007. My simulation evidence shows that traditional statistical inference does notunderperform the bootstrap process proposed by Simar and Wilson. Moreover, my resultsalso show that the truncated model recommended by Simar and Wilson does not outperformthe tobit model in terms of statistical inference. Therefore, the traditional method, t-test, andthe tobit model should continue to be considered applicable tools for a multi-stage DEA model with non-discretionary inputs, despite contrary claims by Simar and Wilson. The thirdessay raises an example of applying my new approach to data from Texas school districts.The results suggest that a lagged variable (e.g. students' performance in the previous year), avariable which has been used in the literature, may not play an important role in determiningefficiency scores. This implies that one may not need access to panel data on individualscores to study school efficiency. My final essay applies a standard DEA model and theMalmquist productivity index to commercial banks in Thailand in order to compare theirefficiency and productivity before and after Thailand?s Financial Sector Master Plan (FSMP)that was implemented in 2004.