Stationary Points for Parametric Stochastic Frontier Models

William Horrace and Ian Wright

Journal of Business & Economic Statistics, 2020, vol. 38, issue 3, 516-526

Abstract: Stationary point results on the normal–half-normal stochastic frontier model are generalized using the theory of the Dirac delta, and distribution-free conditions are established to ensure a stationary point in the likelihood as the variance of the inefficiency distribution goes to zero. Stability of the stationary point and “wrong skew” results are derived or simulated for common parametric assumptions on the model. We discuss identification and extensions to more general stochastic frontier models.

Date: 2020
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Citations: View citations in EconPapers (15)

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Working Paper: Stationary Points for Parametric Stochastic Frontier Models (2016)
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DOI: 10.1080/07350015.2018.1526088

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