Estimation of Technical Inefficiency in Production Frontier Models Using Cross-Sectional Data

Subal Kumbhakar and Hung-Jen Wang ()
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Hung-Jen Wang: National Taiwan University

Chapter Chapter 1 in Benchmarking for Performance Evaluation, 2015, pp 1-73 from Springer

Abstract: Abstract In this paper, we discuss the specification and estimation of technical efficiency in a variety of stochastic frontier production models. The focus is on cross-sectional models. We start from the basic neoclassical production theory and introduce technical inefficiency in there. Various model specifications with several distributional assumptions on the inefficiency component are explored in detail. Theoretical and empirical issues are illustrated with empirical examples using STATA.

Keywords: Production function; Stochastic frontier; Input- and output-oriented technical efficiency; Maximum likelihood; Truncated distributions (search for similar items in EconPapers)
JEL-codes: C13 C21 C51 D24 (search for similar items in EconPapers)
Date: 2015
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Journal Article: Estimation of Technical Inefficiency in Production Frontier Models Using Cross-Sectional Data (2010)
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DOI: 10.1007/978-81-322-2253-8_1

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