A Dynamic Stochastic Frontier Production Model with Time-Varying Efficiency

Evangelia Desli (), Subhash Ray and Subal Kumbhakar

No 2003-15, Working papers from University of Connecticut, Department of Economics

Abstract: In this paper we introduce technical efficiency via the intercept that evolve over time as a AR(1) process in a stochastic frontier (SF) framework in a panel data framework. Following are the distinguishing features of the model. First, the model is dynamic in nature. Second, it can separate technical inefficiency from fixed firm-specific effects which are not part of inefficiency. Third, the model allows one to estimate technical change separate from change in technical efficiency. We propose the ML method to estimate the parameters of the model. Finally, we derive expressions to calculate/predict technical inefficiency (efficiency).

JEL-codes: C31 (search for similar items in EconPapers)
Pages: 11 pages
Date: 2002-09
New Economics Papers: this item is included in nep-ecm, nep-eff and nep-ino
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://media.economics.uconn.edu/working/2003-15.pdf Full text (application/pdf)

Related works:
Journal Article: A dynamic stochastic frontier production model with time-varying efficiency (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:uct:uconnp:2003-15

Access Statistics for this paper

More papers in Working papers from University of Connecticut, Department of Economics University of Connecticut 365 Fairfield Way, Unit 1063 Storrs, CT 06269-1063. Contact information at EDIRC.
Bibliographic data for series maintained by Mark McConnel ().