Simar and Wilson two-stage efficiency analysis for STATA

Badunenko O, Tauchmann H (2018)

Publication Language: English

Publication Type: Other publication type

Publication year: 2018

Journal Issue: No. 06-2018 / SFB 823 Discussio Paper No. 11/2018

DOI: 10.1177/1536867x19893640


When analyzing what determines the efficiency of production, regressing
efefficiency scores estimated by DEA on explanatory variables has much intuitive
appeal. Simar and Wilson (2007) show that this naıve two-stage estimation
procedure suffers from severe flaws, that render its results, and in particular
statistical inference based on them, questionable. At the same time they propose
a statistically grounded bootstrap based two-stage estimator that eliminates theabove mentioned weaknesses of its naıve predecessors and comes in two variants.
This article introduces the new Stata command simarwilson that implements either variant of the suggested estimator in Stata. The command allows for various options, and extends the original procedure in some respects. For instance, it allows for analyzing both, output- and input-oriented efficiency. To demonstrate the capabilities of the new command
simarwilson we use data from the Penn World Tables and the Global Competitiveness Report by the World Economic
Forum to perform a cross-country empirical study about the importance of quality of governance of a country for its efficiency of output production.

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How to cite


Badunenko, O., & Tauchmann, H. (2018). Simar and Wilson two-stage efficiency analysis for STATA.


Badunenko, Oleg, and Harald Tauchmann. Simar and Wilson two-stage efficiency analysis for STATA. 2018.

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