The Estimation of Meta-Frontiers by Constrained Maximum Likelihood

Alexandre Repkine ()
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Alexandre Repkine: Department of Economics, Korea University, Seoul, Republic of Korea

No 1011, Discussion Paper Series from Institute of Economic Research, Korea University

Abstract: Existing approaches to the meta-frontier estimation are largely based on the linear programming technique, which does not hinge on any statistical underpinnings. We suggest estimating meta-frontiers by constrained maximum likelihood subject to the constraints that specify the way in which the estimated meta-frontier overarches the individual group frontiers. We present a methodology that allows one to either estimate meta-frontiers using the conventional set of constraints that guarantees overarching at the observed combinations of production inputs, or to specify a range of inputs within which such overarching will hold. In either case the estimated meta-frontier coefficients allow for the statistical inference that is not straightforward in case of the linear programming estimation. We apply our methodology to the world¡¯s FAO agricultural data and find similar estimates of the meta-frontier parameters in case of the same set of constraints. On the contrary, the parameter estimates differ a lot between different sets of constraints.

Keywords: technical efficiency; meta-frontiers; constrained maximum likelihood (search for similar items in EconPapers)
JEL-codes: O40 O47 (search for similar items in EconPapers)
Date: 2010
New Economics Papers: this item is included in nep-ecm and nep-eff
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Persistent link: https://EconPapers.repec.org/RePEc:iek:wpaper:1011

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