Estimation of Input-Specific Technical and Allocative Inefficiency in Stochastic Frontier Models

Subal Kumbhakar

Oxford Economic Papers, 1988, vol. 40, issue 3, 535-49

Abstract: This paper considers an extension of technical inefficiency to a mor e disaggregate level, viz., input-specific technical inefficiency, based on a stochastic production frontier. Allocative inefficiency is modeled as a departure from the first order conditions for cost mini mization. The production function and the first order conditions for cost minimization, derived from a Cobb-Douglas technology, form the basis of the likelihood function to obtain the maximum likelihood estimates. Panel data on U.S. Class 1 railroads are used to estimate technical inefficiency specific to labor and fuel for each road. Cost of allocative inefficiencies are also calculated for the individual roads. Copyright 1988 by Royal Economic Society.

Date: 1988
References: Add references at CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://links.jstor.org/sici?sici=0030-7653%2819880 ... 0.CO%3B2-V&origin=bc full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

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:oup:oxecpp:v:40:y:1988:i:3:p:535-49

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

Oxford Economic Papers is currently edited by James Forder and Francis J. Teal

More articles in Oxford Economic Papers from Oxford University Press Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK.
Bibliographic data for series maintained by Oxford University Press ().