Accounting for Background Variables in Stochastic Frontier Analysis

Philip Stevens
Authors registered in the RePEc Author Service: Peter F Westaway () and Nigel Pain

No 239, National Institute of Economic and Social Research (NIESR) Discussion Papers from National Institute of Economic and Social Research

Abstract: The question of how to model background variables in stochastic frontier analysis is seldom discussed in the literature. Some studies, following on from a long history of two-step TFP studies, include them in the determinants of efficiency. Others include them in the frontier itself. We propose a statistical method to obtain the appropriate specification of the influences on costs and inefficiency. We provide the example of a stochastic cost frontier for a panel of English and Welsh universities.

Date: 2004-05
New Economics Papers: this item is included in nep-eff
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Citations: View citations in EconPapers (11)

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