Slack and Net Technical Efficiency Measurement: A Bootstrap Approach

Statistical properties of Data Envelopment Analysis (DEA) methods for efficiency estimation are poorly understood and currently the best way forward must be to use bootstrap techniques. The article seeks to extend bootstrap methods to allow investigation of the properties of estimates of inefficiencies due to slack in the use of resources as well as technical efficiency. In an empirical application it is found that inefficiency due to slack is a small component of overall inefficiency and that the DEA technical efficiency estimates have a small downward bias, with confidence intervals that are wide enough to suggest cautious interpretation.