Black-Box Frontiers and Implications for Development Policy - Theoretical Considerations

Johannes Sauer, Klaus Frohberg and Heinrich Hockmann ()

No 18772, Discussion Papers from University of Bonn, Center for Development Research (ZEF)

Abstract: The availability of efficiency estimation software - freely distributed via the internet and relatively easy to use - recently inflated the number of corresponding applications. The resulting efficiency estimates are used without a critical assessment with respect to the literature on theoretical consistency, flexibility and the choice of the appropriate functional form. The robustness of policy suggestions based on inferences from efficiency measures nevertheless crucially depends on theoretically well-founded estimates. This paper addresses stochastic efficiency measurement by critically reviewing the theoretical consistency of recently published technical efficiency estimates with respect to economic development. The results confirm the need for a posteriori checking the regularity of the estimated frontier by the researcher and, if necessary, the a priori imposition of the theoretical requirements.

Keywords: International Development; Research and Development/Tech Change/Emerging Technologies (search for similar items in EconPapers)
Pages: 38
Date: 2004
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:ubzefd:18772

DOI: 10.22004/ag.econ.18772

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