Accounting For Unobservables In Production Models: Management And Inefficiency

Antonio M. Alvarez and Carlos Arias (Univ. of Leon)
Authors registered in the RePEc Author Service: William H Greene

No 341, Econometric Society 2004 Australasian Meetings from Econometric Society

Abstract: This paper explores the role of unobserved managerial ability in production and its relationship with technical efficiency. Previous analyses of managerial ability have been based on strong assumptions about its role in production or the use of proxies. We avoid these shortcomings by introducing managerial ability as an unobserved random variable in a translog production function. The resulting empirical model can be estimated as a production frontier with random coefficients.

Keywords: production; technical efficiency; translog production function (search for similar items in EconPapers)
JEL-codes: A (search for similar items in EconPapers)
Date: 2004-08-11
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Working Paper: Accounting for unobservables in production models:management and inefficiency (2004)
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