A Bayesian analysis of multiple-output production frontier

Carmen Fernandez, Gary Koop and Mark Steel

Edinburgh School of Economics Discussion Paper Series from Edinburgh School of Economics, University of Edinburgh

Abstract: In this paper we develop Bayesian tools for estimating multi-output production frontiers in applications where only input and output data are available. Firm-specific inefficiency is measured relative to this frontier. Our work has important differences from the existing literature, which either assumes a classical econometric perspective with restrictive functional form assumptions, or a non-stochastic approach which directly estimates the output distance function. Bayesian inference is implemented using a Markov Chain Monte Carlo algorithm. A banking application shows the ease and practicality of our approach.

Keywords: banking data; efficiency; productivity; Markov chain Monte Carlo (search for similar items in EconPapers)
JEL-codes: C11 D24 (search for similar items in EconPapers)
Pages: 41
Date: 1999
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: A Bayesian analysis of multiple-output production frontiers (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:edn:esedps:21

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