Abstract

In order to increase the effectiveness of traditional market policies, in which enormous funds are invested, it can be said that objective and transparent performance evaluation of traditional markets takes precedence. This study proposed two improvements to the existing DEA method in order to improve efficiency studies on traditional markets. In other words, by using a two-step approach using bootstrap, we first calculated the bias-corrected efficiency and examined how external environmental factors affect the efficiency of the traditional market. First, in order to improve the current DEA efficiency index, which is overestimated based on a finite number of samples, we tried to obtain a bias-corrected efficiency index through bootstrapping. This improvement has caused significant changes in the efficiency rankings among existing traditional markets. Second, truncated regression analysis was conducted by bootstrapping to explain the differences in efficiency between traditional markets that inevitably occur depending on the external environment such as location of traditional markets. As a result, it was found that the existence of large retail stores had a negative effect on the efficiency of traditional markets, while the existence of public facilities and transportation facilities had a positive effect on efficiency. If such an external environment becomes an important cause for the difference in efficiency between traditional markets, regardless of internal management efforts in traditional markets, it can be said that appropriate adjustments and modifications are required in performance evaluation.

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