Estimating technical efficiencies of airports in the Greater China: stochastic output distance function method vs. data envelopment analysis method
by Clement Kong Wing Chow, Michael Ka Yiu Fung, Japhet Sebastian Law
International Journal of Shipping and Transport Logistics (IJSTL), Vol. 2, No. 3, 2010

Abstract: In this paper, we study the technical efficiencies of Chinese airportsby using multi-output stochastic output distance function analysis. The benefits of this approach are as follows: 1) It allows multiple-output and multiple-input analysis to be conducted in just one equation. However, in single-output production frontier analysis, two stages of empirical estimation are required.; 2) The estimated values of output distance are in fact the technical efficiency scores. We compare and contrast the estimated technical efficiencies computed based on the stochastic output distance function method with those computed based on DEA method. In terms of the ranking of efficiency scores, we conclude that both methods are consistent with each other.

Online publication date: Wed, 02-Jun-2010

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