Frontier estimation in nonparametric location-scale models

Jean-Pierre Florens, Leopold Simar and Ingrid Van Keilegom ()

Journal of Econometrics, 2014, vol. 178, issue P3, 456-470

Abstract: Conditional efficiency captures efficiency of firms facing heterogeneous environmental conditions. Traditional approaches estimate nonparametrically conditional distribution requiring smoothing techniques. We rather use a flexible nonparametric location-scale model to eliminate the dependence of inputs/outputs on these factors. These “pre-whitened” inputs/outputs define the optimal frontier function and a “pure” measure of efficiency more reliable to produce rankings, since the influence of external factors has been eliminated. Both full and order-m frontiers are used. The asymptotic properties are established. We can also derive the frontiers in the original units with their asymptotic properties. The approach is illustrated with some simulated and real data.

Keywords: Nonparametric frontiers; Efficiency analysis; Robust estimation of frontiers; Conditional efficiency (search for similar items in EconPapers)
JEL-codes: C13 C14 C49 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (37)

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Related works:
Working Paper: Frontier estimation in nonparametric location-scale models (2013)
Working Paper: Frontier estimation in nonparametric location-scale models (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:econom:v:178:y:2014:i:p3:p:456-470

DOI: 10.1016/j.jeconom.2013.06.005

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