Truncated Regression Approach Research Articles

Impact of Seaport Competition on Technical Efficiency: Simar–Wilson Analysis of European Container Ports

This paper examines the effects of environmental factors (port-city GDP, population size, connectivity to hinterland, draught level and distance from the closest port Hub) and competition on the efficiency of a number of North and South European seaports. For this purpose, a bootstrap data envelopment analysis truncated regression approach was applied to 35 container ports, in the 2004 - 2018 period. Research findings indicate that the connectivity of a port’s country and draught level have a positive impact on the efficiency of both Northern and Southern European seaports. In addition, our results revealed that the efficiency of Southern European seaports tends to increase with competition intensity, whereas that of Northern European seaports seems to decrease with intensified competition, due to investment discrepancies, necessary for attracting a wider range of customers.

Are handloom micro-enterprises in India efficient? Estimation based on DEA and bootstrap truncated regression approach

PurposeAlthough handloom is a significant source of livelihood for millions of people in India, it performs poorly compared to other sectors of the economy, which may be the root of technical inefficiency. Until now, to measure technical efficiency, no studies have been carried out; therefore, the purpose of this study is to estimate the technical efficiency in the handloom micro-enterprises in India.Design/methodology/approachThis study includes 427 handloom micro-entrepreneurs from the Indian state of Assam. Using bootstrap truncated regression, the data envelopment analysis (DEA) was used to calculate the technical efficiency and identify the factors responsible for inefficiency.FindingsThe findings of this study reveal that handloom enterprises are 75% pure technically efficient, suggesting room for input reduction. The bootstrap truncated regression results show that education, prior experience, modern technology, ICT, bank loan, training, gender and location significantly influence the technical efficiency of handloom enterprises.Research limitations/implicationsDespite recent advances in the DEA method, this study used a traditional form of DEA. This study used only one output and a limited set of inputs. Better results could have been obtained by expanding the number of inputs and output. Finally, the data for this study has been obtained from a very narrow geographic area. The production practices of the handloom enterprises in other parts of the region and other states might vary considerably.Practical implicationsTechnical efficiency measurement has management implications for businesses because it allows entrepreneurs to determine how much less input is required to produce the same output. A meticulous analysis can pinpoint the causes of inefficiency.Originality/valueThis paper aims to make two significant contributions to the extant literature. First, to the best of the authors’ knowledge, no published document has analyzed the technical efficiency of handloom micro-enterprises anywhere in the world. The authors fill this void by systematically analyzing the technical efficiency of the handloom industry in Assam.

The Implementation of Hierarchical Linear Spline Regression Model to Maternal Mortality Rate Data in Indonesia

Hierarchical spline nonparametric regression analysis is one regression method to identify the correlation pattern among the variables with unidentified curves and nested data structure using a spline truncated regression approach on its function. On the maternal mortality rate, there is a nested data structure between the regional/ city level and provincial level. This study aimed to identify the correlation between the response variable and predictor variable from the maternal mortality rate data in 2020. There are two analyzed levels consisting of the city/ regional level (level-1) with 256 cities/ regencies and the provincial level (level-2). The level-1 predictor variable is total pregnant women taking blood booster supplements and total pregnant women attending K4 antenatal care and the level-2 predictor variable is poverty rates and school enrollment rates. A spline truncated approach has high flexibility and this study employs Maximum Likelihood as its estimator. The finding suggested that if a province has a lower poverty rate than 7.24%, maternal mortality rates tend to increase. If a province has lower enrolment rates than 67.8 %, the maternal mortality rate tends to decrease. If a regency or a city has fewer pregnant women taking blood booster supplements than 2258, maternal mortality rates tend to decrease. If a regency or a city has fewer pregnant women attending K4 antenatal care than 2258, the maternal mortality rate tends to decrease.

A Comparison of Efficiency of Life Insurance Companies in Mainland China and Taiwan Using Bootstrapped Truncated Regression Approach

A Comparison of Efficiency of Life Insurance Companies in Mainland China and Taiwan Using Bootstrapped Truncated Regression Approach

Does quality help the financial viability of hospitals? A data envelopment analysis approach

In this work, we analyze the financial viability of U.S. hospitals by investigating the impact of clinical and experiential quality as its determinants. We adopt Simar and Wilson's two-stage bootstrapped truncated regression approach. Specifically, we use data envelopment analysis (DEA) in the first stage to estimate efficiency scores. Then, we use truncated regression estimation with the double-bootstrap method to test the significance of the quality variables. Given the financial problems recently experienced by U.S. hospitals, we use readmission rates and costs as our outputs to investigate how well hospitals can lower readmission rates while minimizing their costs, since recent policy changes have tied a portion of hospital reimbursements to their readmission rates, making both variables crucial outcome goals. We find that both clinical and experiential quality are significantly associated with the higher financial viability of hospitals. Further, focusing on these two quality dimensions together has additional benefits.

Productivity growth, catching-up and technology innovation in microfinance institutions in India: evidence using a bootstrap Malmquist Index approach

PurposeThis paper aims to examine the total factor productivity (TFP) change and its components: efficiency change and technical change in microfinance institutions (MFIs) in India operating from 2005 to 2018. The study also scrutinizes the variations in productivity levels across the distinct organizational form and size groups of MFIs. In addition to this, the authors identify the contextual factors that determine TFP growth, catching-up and technology innovation in MFIs.Design/methodology/approachThe study employs a smooth homogeneous bootstrap estimation procedure of Simar and Wilson (1999) for obtaining reliable estimates of Malmquist indices –productivity and its components – in a data envelopment analysis (DEA) framework for individual MFIs. In order to identify the determinants of productivity change and its components, the study follows Simar and Wilson's (2007) guidelines and applies a bootstrap truncated regression model. The double bootstrap procedure performs well, both in terms of allowing correct estimation of bias and deriving statistically consistent productivity estimates in the first and root mean square errors in the second stage of the analysis.FindingsThe empirical results reveal that the MFIs have shown average productivity growth of 6.70% during the entire study period. The observed productivity gains are primarily contributed by a larger efficiency increase at the rate of 4.80%, while technical progress occurs at 2.3%. Nonbanking financial companies (NBFC)-MFIs outperformed non-NBFC-MFIs. Small MFIs show the highest TFP growth in terms of size groups, followed by the large MFIs and medium MFIs. The bootstrap truncated regression results suggest that the credit portfolio, size and age of MFIs matter in achieving higher productivity levels.Practical implicationsThe practical implication drawn from the study is that the Indian MFI industry might adopt the latest technology and innovations in the products, risk assessment and credit delivery to improve their productivity levels. The industry must focus on enhancing the managerial skill of its employees to achieve a high productivity level.Originality/valueThis study is perhaps the initial attempt to explain the productivity behavior of MFIs in India by deploying a statistically robust double bootstrap procedure in the DEA-based Malmquist Productivity Index (MPI) framework. The authors estimate the bias-adjusted productivity index and its decompositions, which represent more reliable and statistically consistent estimates. For contextual factors responsible for driving productivity change, the study deploys a bootstrap truncated regression approach.

Deregulation, efficiency and policy determination: An analysis of Australia's electricity distribution sector

In 1998, the Australian electricity distribution was deregulated with the aim of promoting competition and reducing retail prices. However, since then these outcomes have not transpired, which raises the question of whether there may be underlying causes leading to inefficiencies within the power distribution industry. To assess the performance of the electricity distribution system and sources of (in)efficiency since deregulation, we employ Simar and Wilson's (2007) double bootstrap data envelopment analysis truncated regression approach. The results suggest that most distributors were operating well below efficient levels for the period concerned. In the second-stage analysis, the results indicate that reliability promotes efficiency suggesting that a focus should be placed on the continuous supply of energy. Specifically, inefficient distributors can improve network reliability by replacing aged poles and the expansion of market size could encourage healthy competition.

Is innovation in ICT valuable for the efficiency of Italian museums?

ABSTRACT This paper investigates the influence of information and communication technologies (ICT) on the efficiency in attracting visitors of Italian museums. Notwithstanding the extensive literature on museum performance measurement, the analysis of the role of technological innovation is relatively neglected. As a first attempt to fill this lacuna, this study presents a two-stage analysis of a novel sample of Italian state-owned museums built by merging information drawn from different sources. In the first stage, we use bootstrapped Data Envelopment Analysis (DEA) to measure the efficiency of museums. In the second stage, we use a bootstrap truncated regression approach to test the extent to which different forms of ICT affect museum efficiency. We distinguish the ICT investments into ‘in situ’ and online services, since the former improve the visitors’ experience on site, while the latter can prepare for the visit or, even, be a substitute of the visit. The results reveal that the use of ICT is generally associated with better performances but ‘in situ’ services show to play a major role.

Falling efficiency levels of Indian coal-fired power plants: A slacks-based analysis

We use a comprehensive data set covering almost all Indian coal-fired power plants over the period 2005–14 to evaluate the technical efficiency of power plants using the Slacks-Based Measure model. We find that average technical efficiency falls from 0.847 in 2005 to 0.742 in 2014, indicating substantial scope for efficiency improvement. This trend is driven primarily by declining energy efficiency rather than declining managerial (non-energy) efficiency. We use Simar and Wilson's bootstrapped truncated regression approach to analyze the determinants of technical efficiency. We find an inverted-U shaped relationship exists between efficiency and plant age, with maximum efficiency levels observed between 22 and 23 years of age. Privately owned plants operate at higher efficiency levels than their State-owned counterparts. Large plants are more efficient than small and medium size plants. Coal quality has no significant influence on efficiency as usage of higher calorific value coal is not accompanied by a concomitant reduction in coal use. Foreign equipped plants operate at higher efficiency levels than Indian equipped plants.

Recalibrating wind‐speed forecasts using regime‐dependent ensemble model output statistics

AbstractRaw output from deterministic numerical weather prediction models is typically subject to systematic biases. Although ensemble forecasts provide invaluable information regarding the uncertainty in a prediction, they themselves often misrepresent the weather that occurs. Given their widespread use, the need for high‐quality wind‐speed forecasts is well‐documented. Several statistical approaches have therefore been proposed to recalibrate ensembles of wind‐speed forecasts, including a heteroscedastic truncated regression approach. An extension to this method that utilises the prevailing atmospheric flow is implemented here in a quasigeostrophic simulation study and on Global Ensemble Forecasting System (GEFS) reforecast data, in the hope of alleviating errors owing to changes in the synoptic‐scale atmospheric state. When the wind speed depends strongly on the underlying weather regime, the resulting forecasts have the potential to provide substantial improvements in skill relative to conventional post‐processing techniques. This is particularly pertinent at longer lead times, where there is more improvement to be gained over current methods, and in weather regimes associated with wind speeds that differ greatly from climatology. In order to realise this potential, an accurate prediction of the future atmospheric regime is required.

Efficiency of health resource utilisation in primary-level maternal and child health hospitals in Shanxi Province, China: a bootstrapping data envelopment analysis and truncated regression approach

BackgroundDistrict- and county-level maternal and child health hospitals (MCHHs) are positioned to provide primary maternal and child healthcare in rural and urban areas of China. Their efficiencies and productivity largely affect the equity and accessibility of maternal and child health care. This study aimed to assess the efficiency of district- and county-level MCHHs in China and identify their associated factors.MethodsThirty-three district- and 84 county-level MCHHs were selected from Shanxi Province in 2017. At the first stage, bootstrapping data envelopment analysis (DEA) models were established to calculate the technical efficiency (TE), pure technical efficiency (PTE) and scale efficiency (SE) of district- and county-level hospitals. At the second stage, the estimated efficiency scores were regressed against external and internal hospital environmental factors by using bootstrap truncated regression to identify their determinants.ResultsThe average TE, PTE and SE scores for district-level MCHHs were 0.7433, 0.8633 and 0.9335, respectively. All hospitals were found to be weakly efficient, although more than 50% of the hospitals performed with efficient SE (SE scores≥100%). As for county-level MCHHs, their average TE, PTE and SE scores were 0.5483, 0.6081 and 0.9329, respectively. The hospitals with TE and PTE scores less than 0.7 accounted for more than 60%, and no hospital was observed to operate effectively. Truncated regressions suggested that the proportion of health professionals, including doctors, nurses, pharmacists, inspection technician and image technician (district level: β = 0.57, 95% CI = 0.30–0.85; county level: β = 0.33, 95% CI = 0.15–0.52), and the number of health workers who received job training (district level: β = 0.67, 95% CI = 0.26–1.08; county level: β = 0.34, 95% CI = 0.14–0.54) had a positive association with efficiency scores. The amount of financial subsidy (β = 0.07, 95% CI = 0.05–0.09) was found to be directly proportional to the productive efficiency of the county-level MCHHs.ConclusionThe operational inefficiency of district- and county-level MCHHs in Shanxi Province is severe and needs to be substantially improved, especially in terms of TE and PTE. Hiring additional medical personnel and ensuring the stability of the workforce should be prioritised. The Chinese government must provide sufficient financial subsidy to compensate for service costs.

Learning environment and primary school efficiency

Purpose Existing studies of school efficiency primarily specify teacher inputs as the number of teachers and perhaps the student-teacher ratio. As a result, there is no direct qualitative recognition of the learning environment. The purpose of this paper is to incorporate the learning environment directly into the assessment of school efficiency. Design/methodology/approach The authors employ data envelopment analysis to derive efficiency scores and the double-bootstrap truncated regression approach in Simar and Wilson’s (2007) Journal of Econometrics to quantify the sources of efficiency in 430 Queensland state primary schools. In the first stage, the outputs of student National Assessment Program-Literacy and Numeracy scores and the inputs of full-time equivalent teaching staff and cumulative capital expenditure per student are used to measure efficiency. In the second stage, the authors specify an index of community socio-educational advantage, class size, the share of teachers with postgraduate qualifications, funds spent on professional development, and surveyed opinions from parents/caregivers, students, staff and principals on the learning environment to explain these measures of efficiency. Findings Socio-economic background and the teaching environment affect school efficiency. Although not all variables related to teacher contribution are significant, there is evidence to suggest that teachers have a positive influence on student performance hence school efficiency. Teachers ability to clearly explain the requirements of schoolwork tasks and listening to student opinions sets an ideal student engagement environment which can have a profound impact on student learning. Practical implications From a policy perspective, policy makers should target resources at inefficient schools aimed at enhancing student learning through teacher development and, at the same time, providing financial and non-financial educational assistance to students and their families from a low socio-educational background. Originality/value This is the first large-scale primary school efficiency analysis to incorporate the Simar and Wilson (2007) approach to explaining the determinants of efficiency, including teaching environment from the perspective of students, teachers and other stakeholders.

Delivery of Health Care Service in the Organization of Islamic Cooperation (OIC) Member States and Regional Diversity: A Bootstrap Dea Analysis

For the last few decades, demographic changes require new and expensive medical innovations, which ultimately put the health care system under financial pressure. Therefore, provision of efficient services for the sustainability in health care system is mandatory. The objective of this study is to explore the performance of health care services provided in 55 OIC member countries during 2011 and 2015.The bootstrap Data Envelopment Analysis and Truncated regression approach have been applied to observe the health system and estimate the efficiency score in 55 OIC member countries. The findings of DEA show that cost efficiency (CE), technical efficiency (TE) and allocative efficiency (AE) of health care system of OIC member countries on average are 0.52, 0.72, and 0.70, respectively. It indicates that OIC countries are not good at selecting cost efficient input mix. The results of truncated regression approach indicate that out-pocket health expenditures is the most important determinant relative to other indicators. It is suggested that it is hard to improve the overall health system at most efficient level. For this purpose there is a need to educate the mass and provide the better opportunities so that people can earn handsome amount, through which they may have better health care.

Semiparametric Spline Truncated Regression on Modelling AHH in Indonesia

Life expectancy (AHH) is an indicator that can reflect the health status of a region, whether from infrastructure, access, and health quality. As one of the dimensions of the Human Development Index (HDI), AHH is deemed to need global attention. Today, AHH growth in developing countries is slow even slower when compared to underdeveloped countries. In Indonesia, the trend of life expectancy at birth continues to increase, but the achievement of national AHH is still lagging behind the AHH of neighboring countries. In addition, as an archipelagic country, the achievement of AHH among provinces still shows a disparity. This study modeled the factors that determine AHH with semiparametric spline truncated regression approach. The method of selecting optimum knots using Generalized Cross Validation (GCV) method. The best model that is formed is a model using three knots with the coefficient of determination of 84.70 percent. Significant variables were percentage of the poor population, percentage of households using clean drinking water, percentage of population who have health complaints, the percentage of under five years who have been complete immunized, and Mean Years of Schooling (MYS). The results of this study are expected to be an input for the Government to take policy in order to improve the national AHH as a whole

국내 주요 유통기업의 기술적 효율성 결정요인 분석: 부트스트랩 자료포락분석과 절단회귀분석 접근

국내 주요 유통기업의 기술적 효율성 결정요인 분석: 부트스트랩 자료포락분석과 절단회귀분석 접근

Impact of gender and governance on microfinance efficiency

This study examines the efficiency of South Asian microfinance institutions (MFIs) using Data Envelopment Analysis. Bias corrected efficiency estimates for the individual MFIs are regressed on a set of explanatory variables (including governance and gender) employing the double bootstrap truncated regression approach (Simar and Wilson, 2007) and panel data regression. First stage results suggest that South Asian MFIs are more financially efficient than socially efficient. More precisely, we find that these MFIs are technically inefficient but scale efficient, and that there was some improvement in financial efficiency over time. The relatively low average efficiency scores show that there is quite a bit of variation in microfinance efficiency. Second stage regression reveals that female loan officers are positive determinants of MFIs’ efficiency. We find a strong association between a MFI’s governance and its financial and social efficiency.

On the role of environmental corruption in healthcare infrastructures: An empirical assessment for Italy using DEA with truncated regression approach

ObjectivesThis paper investigates empirically whether the institutional features of the contracting authority as well as the level of ‘environmental’ corruption in the area where the work is localised affect the efficient execution of public contracts for healthcare infrastructures. MethodsA two-stage Data Envelopment Analysis (DEA) is carried out based on a sample of Italian public contracts for healthcare infrastructures during the period 2000–2005. First, a smoothed bootstrapped DEA estimator is used to assess the relative efficiency in the implementation of each single infrastructure contract. Second, the determinants of the efficiency scores variability are considered, paying special attention to the effect exerted by ‘environmental’ corruption on different types of contracting authorities. ResultsOur results show that the performance of the contracts for healthcare infrastructures is significantly affected by ‘environmental’ corruption. Furthermore, healthcare contracting authorities are, on average, less efficient and the negative effect of corruption on efficiency is greater for this type of public procurers. ConclusionsThe policy recommendation coming out of the study is to rely on ‘qualified’ contracting authorities since not all the public bodies have the necessary expertise to carry on public contracts for healthcare infrastructures efficiently.

Performance of hospital services in Ontario: DEA with truncated regression approach

In this work, we analyze production performance of hospital services in Ontario (Canada), by investigating its key determinants. Using data for the years 2003 and 2006, we follow the two-stage approach of Simar and Wilson (2007) [76]. Specifically, we use Data Envelopment Analysis (DEA) at the first stage to estimate efficiency scores and then use truncated regression estimation with double-bootstrap to test the significance of explanatory variables. We also examine distributions of efficiency across geographic locations, size and teaching status. We find that several organizational factors such as occupancy rate, rate of unit-producing personnel, outpatient–inpatient ratio, case-mix index, geographic locations, size and teaching status are significant determinants of efficiency.

Efficiency of microfinance institutions in Sri Lanka: a two-stage double bootstrap DEA approach

This study examines technical efficiency and its determinants of 36 microfinance institutions (MFIs) in Sri Lanka using a two-stage double bootstrap approach. In the first-stage, bias-corrected Data Envelopment Analysis (DEA) efficiency estimates for the individual MFI are obtained by means of the smoothed homogeneous bootstrapped procedure (Simar and Wilson, 2000) and then they are regressed on a set of explanatory variables employing the double bootstrap truncated regression approach (Simar and Wilson, 2007). Two different DEA models are designed to obtain DEA scores along financial and social perspectives. According to the results from the first stage, many MFIs in Sri Lanka do not escape criticism of financial and social inefficiency. Second stage regression reveals that age and capital-to-assets are significant determinants on financial efficiency whereas age, type of the institution and return-on-assets are the crucial determinants of social efficiency.

EFFICIENCY AND PRODUCTIVITY OF SINGAPORE'S MANUFACTURING SECTOR 2001–2010: AN ANALYSIS USING BOOTSTRAPPED TRUNCATED APPROACH

This paper seeks to explain the lagging productivity in Singapore's manufacturing noted in the statements of the Economic Strategies Committee (ESC) Report 2010. Two methods are employed: the Malmquist productivity to measure total factor productivity (TFP) change and Simar and Wilson's (2007) bootstrapped truncated regression approach which first derives bias-corrected efficiency estimates before being regressed against explanatory variables to help quantify sources of inefficiencies. The findings reveal that growth in TFP was attributed to efficiency change with no technical progress. Sources of efficiency were attributed to quality of worker and flexible work arrangements while the use of foreign workers lowered efficiency.