We propose an empirical application of models derived in Bonanno et al. (2017) for estimating cost efficiency (CE) on data used by Greene (1990) to test Gamma distribution for the inefficiency component and by Smith (2008) to test the dependence between the two error terms of a Stochastic Frontier (SF). We also derive the closed–form of density function of the overall error term and the formula to calculate the Cost Efficiency (CE) scores

Graziella Bonanno and Filippo Domma ()
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Filippo Domma: University of Calabria

Economics Bulletin, 2018, vol. 38, issue 4, 2379-2388

Keywords: Stochastic frontier; cost efficiency; Copula functions; dependence; electricity (search for similar items in EconPapers)
JEL-codes: D2 Q4 (search for similar items in EconPapers)
Date: 2018-12-10
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