Misspecification in allocative inefficiency: A simulation study

Levent Kutlu

Economics Letters, 2013, vol. 118, issue 1, 151-154

Abstract: We make an extensive simulation analysis in order to investigate the consequences of ignoring the potentially complex and data dependent effects of allocative inefficiency on the estimation of stochastic frontier panel data models. Generally system estimators perform worse than single equation estimators. This result holds even when we approximate the allocative inefficiency.

Keywords: Technical inefficiency; Allocative inefficiency; Stochastic frontier; Panel data (search for similar items in EconPapers)
JEL-codes: C2 C3 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:118:y:2013:i:1:p:151-154

DOI: 10.1016/j.econlet.2012.10.004

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