 Does Xistence of Inefficiency Matter to a Neoclassical Xorcist? Some Econometric Issues in Panel Stochastic Frontier ModelsSubal Kumbhakar and David Bernstein A chapter in Advances in Efficiency and Productivity Analysis, 2021, pp 139-161 from Springer Abstract: Abstract Does the presence of inefficiency affect estimation of the production function? This paper shows that one cannot ignore inefficiency in estimating the production function simply because standard neoclassical production theory does not recognize its existence. Exclusion of inefficiency can cause inconsistency in the estimates of the technology parameters due to omitted variables which are determinants of inefficiency. We show how one can avoid this inconsistency in estimating the production technology irrespective of whether one is interested in estimating inefficiency or not. Our proposed estimation methods use two state-of-the-art stochastic frontier (SF) panel models. Since distributional assumptions are often a bone of contention even among the followers of the SF approach, we focus on estimation methods that do not rely on distributional assumptions for the inefficiency and noise components. Keywords: Panel data; Random effects; Fixed effects; Semiparametric; Nonparametric; Omitted variables (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-030-47106-4_7 Ordering information: This item can be ordered from DOI: 10.1007/978-3-030-47106-4_7 Access Statistics for this chapter More chapters in Springer Proceedings in Business and Economics from Springer |
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