The Spatial Efficiency Multiplier and Random Effects in Spatial Stochastic Frontier Models

Anthony J. Glass, Karligash Kenjegalieva (), Robin Sickles and Thomas Weyman-Jones
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Anthony J. Glass: Loughborough University
Thomas Weyman-Jones: Loughborough University

Working Papers from Rice University, Department of Economics

Abstract: We extend the emerging literature on spatial frontier models in three respects. Firstly, we account for latent heterogeneity by developing a maximum likelihood random effects spatial autoregressive (SAR) stochastic frontier model. Secondly, to analyze the finite sample properties of a spatial stochastic frontier model we develop a Monte Carlo experimental methodology which we then apply. Thirdly, we introduce the concept of the spatial efficiency multiplier and show that the efficiency benchmark for a productive unit from the structural form of a spatial stochastic frontier model differs from the efficiency benchmark from the reduced form of the model.

JEL-codes: C23 C51 D24 Q10 (search for similar items in EconPapers)
Date: 2016-11
New Economics Papers: this item is included in nep-ecm, nep-eff, nep-ore and nep-ure
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:ecl:riceco:16-002

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