Lurking in the Shadows : Testing For Shadow Price Differences with Applications in Economic Regulation

This paper introduces a novel approach for statistically testing group differences in shadow price estimates produced by non parametric efficiency models. The test can be applied across groups being assessed using a common efficient frontier or across groups assessed using different efficient frontiers. We demonstrate empirical use cases of each by analysing the impact of regulatory imposition in European banking and European sport respectively. Each example suggests significant unintended consequences of regulation