A Note on Theory of Productive Efficiency and Stochastic Frontier Models

Aikaterini Kokkinou ()

European Research Studies Journal, 2010, vol. XIII, issue 4, 109-118

Abstract: Neoclassical economics assume that producers in an economy always operate efficiently, however in real terms, producers are not always fully efficient. This difference may be explained both in terms of efficiency, as well as unforeseen exogenous shocks outside the producer control. This paper aims to analyse the productive efficiency estimation through a stochastic frontier analysis approach. Particularly, this paper attempts to examine systematically the theoretical background of stochastic frontier function estimation, focusing on the analysis of the efficiency function, in order to provide a solid background for productive efficiency estimation.

Keywords: Stochastic Frontier Analysis; Productive Efficiency Function; Efficiency (search for similar items in EconPapers)
JEL-codes: C14 C23 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:ers:journl:v:xiii:y:2010:i:4:p:109-118

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