A panel frontier system model with good and bad outputs and endogenous treatment decision
Hung-pin Lai and
Subal Kumbhakar
Economics Letters, 2021, vol. 198, issue C
Abstract:
In this paper we consider a simultaneous panel stochastic frontier system for the production of good and bad outputs when inefficiency is present in both. In addition, we consider treatment of bad output when the treatment decision is endogenous. Inclusion of a treatment decision is important because treatment affects production of bad output which, in turn, affects production of good output. Because of simultaneity, inefficiency from the production of good (bad) output is transmitted to the production of bad (good) output. We derive the likelihood function and formulas for predicting inefficiency (efficiency) for both good and bad outputs as well as overall inefficiency.
Keywords: Simultaneity; Good and bad outputs; Inefficiency; Treatment; Closed skew normal distribution (search for similar items in EconPapers)
JEL-codes: C30 D24 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:
Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165176520304092
Full text for ScienceDirect subscribers only
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:198:y:2021:i:c:s0165176520304092
DOI: 10.1016/j.econlet.2020.109649
Access Statistics for this article
Economics Letters is currently edited by Economics Letters Editorial Office
More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().