Frontier Estimation of a Cost Function System Model with Local Least Squares: An Application to Dutch Secondary Education

Jos Blank ()

A chapter in Productivity and Inequality, 2018, pp 103-118 from Springer

Abstract: Abstract In this paper, we propose a method for cost efficiency measurement that is based on local estimation in several stages. The method is based on weighted least squares where weights depend on the distance of an observation to all other observations and on the distance to the cost frontier. The new element in the method is that it also includes the information from the cost share equations and includes cost efficiency in the weighting matrix. The latter is derived from a first stage and implemented in a second stage analysis. An application to a data set of Dutch school boards in secondary education shows that it works well in practice. It produces a number of reliable estimates. It also shows a variation in outcomes that would be hard to cover with, for instance, traditional procedures such as SFA on a translog cost function.

Keywords: Local estimation; Cost efficiency; Scale economies; Technical change; Education (search for similar items in EconPapers)
JEL-codes: C01 D24 I21 (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:spr:prbchp:978-3-319-68678-3_4

Ordering information: This item can be ordered from
http://www.springer.com/9783319686783

DOI: 10.1007/978-3-319-68678-3_4

Access Statistics for this chapter

More chapters in Springer Proceedings in Business and Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().