 Alternative Approaches to Technical Efficiency Estimation in the Stochastic Frontier ModelH. de-Graft Acquah and E. E. Onumah AGRIS on-line Papers in Economics and Informatics, 2014, vol. 06, issue 2, 8 Abstract: Estimating the stochastic frontier model and calculating technical efficiency of decision making units are of great importance in applied production economic works. This paper estimates technical efficiency from the stochastic frontier model using Jondrow, and Battese and Coelli approaches. Simulated data is employed to compare the alternative methods. Empirical results show a strong correlation between the alternative methods regardless of the differences in the actual values of the efficiency estimates. Mean technical efficiency is sensitive to the choice of estimation method. Analysis of variance and Tukey’s test suggest difference in means between the efficiency scores from different methods. Battese and Coelli’s approach produces more homogenous estimates of technical efficiency when compared with the Jondrow’s mean or mode approach. Our results suggest that differences in conclusion are possible when the alternative methods of measuring technical efficiency are applied. Keywords: Research; Methods/Statistical; Methods (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ags:aolpei:182485 Access Statistics for this article More articles in AGRIS on-line Papers in Economics and Informatics from Czech University of Life Sciences Prague, Faculty of Economics and Management Contact information at EDIRC. |
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