Title: Estimating technical efficiencies of airports in the Greater China: stochastic output distance function method vs. data envelopment analysis method

Authors: Clement Kong Wing Chow, Michael Ka Yiu Fung, Japhet Sebastian Law

Addresses: Department of Marketing and International Business, Lingnan University, Tuen Mun, N.T., Hong Kong; Aviation Policy and Research Centre, Chinese University of Hong Kong, Shatin, N.T., Hong Kong. ' Department of Decision Sciences and Managerial Economics, Faculty of Business Administration, Chinese University of Hong Kong, Shatin, N.T., Hong Kong; Aviation Policy and Research Centre, Chinese University of Hong Kong, Shatin, N.T., Hong Kong. ' Department of Decision Sciences and Managerial Economics, Faculty of Business Administration, Chinese University of Hong Kong, Shatin, N.T., Hong Kong; Aviation Policy and Research Centre, Chinese University of Hong Kong, Shatin, N.T., Hong Kong

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.

Keywords: technical efficiency; DEA method; stochastic output distance function; China.

DOI: 10.1504/IJSTL.2010.033510

International Journal of Shipping and Transport Logistics, 2010 Vol.2 No.3, pp.284 - 299

Available online: 02 Jun 2010 *

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