Estimating the Technical Efficiency of Mexican States

Antonio Alvarez, Rafael Garduño-Rivera (rafael.garduno@cide.edu) and Héctor Núñez (hector.nunez@cide.edu)
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Héctor Núñez: Division of Economics, CIDE
Authors registered in the RePEc Author Service: Rafael Garduño Rivera

No DTE 588, Working Papers from CIDE, División de Economía

Abstract: In this paper we estimate the technical efficiency of Mexican states using several stochastic production frontier models. The empirical section uses panel data over the period 1988-2008. A distinctive feature of the paper is to use socioeconomic and location data in order to control for the heterogeneity of the states. We find that inefficiency explains part of the difference in production across regions, which is not accounted by other explanatory variables. Our results show that infrastructure, education, productive specialization and the presence of oil production shift the production frontier upwards. Additionally, northern states are more efficient than the rest of the country.

Keywords: Regional efficiency; stochastic frontier; state characteristics; panel data. (search for similar items in EconPapers)
JEL-codes: H55 I38 J26 O40 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2015-03
New Economics Papers: this item is included in nep-eff
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