Endogenous environmental variables in stochastic frontier models

Christine Amsler, Artem Prokhorov and Peter Schmidt

Journal of Econometrics, 2017, vol. 199, issue 2, 131-140

Abstract: This paper considers a stochastic frontier model that contains environmental variables that affect the level of inefficiency but not the frontier. The model contains statistical noise, potentially endogenous regressors, and technical inefficiency that follows the scaling property, in the sense that it is the product of a basic (half-normal) inefficiency term and a parametric function of the environmental variables. The environmental variables may be endogenous because they are correlated with the statistical noise or with the basic inefficiency term.

Keywords: Endogeneity; Stochastic frontier; Environmental variables (search for similar items in EconPapers)
JEL-codes: C10 C26 C36 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (47)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:econom:v:199:y:2017:i:2:p:131-140

DOI: 10.1016/j.jeconom.2017.05.005

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