A Note on Theory of Productive Efficiency and Stochastic Frontier Models
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In this article, the theoretical background of stochastic frontier function estimation is examined systematically, focusing on the analysis of the efficiency function, in order to provide a solid background for productive efficiency estimation.Abstract:
Neoclassical economics assume that producers in an economy always operate efficiently, however in real terms, producers are not always fully efficient. This difference may be explained both in terms of efficiency, as well as unforeseen exogenous shocks outside the producer control. This paper aims to analyse the productive efficiency estimation through a stochastic frontier analysis approach. Particularly, this paper attempts to examine systematically the theoretical background of stochastic frontier function estimation, focusing on the analysis of the efficiency function, in order to provide a solid background for productive efficiency estimation.read more
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References
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Formulation and estimation of stochastic frontier production function models
TL;DR: In this paper, the authors define the disturbance term as the sum of symmetric normal and (negative) half-normal random variables, and consider various aspects of maximum-likelihood estimation for the coefficients of a production function with an additive disturbance term of this sort.
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An Introduction to Efficiency and Productivity Analysis
TL;DR: This book is the first systematic survey of performance measurement with the express purpose of introducing the field to a wide audience of students, researchers, and practitioners.
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Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error
Productivity growth, technical progress and efficiency change in industrial countries
TL;DR: In this article, the authors analyzed productivity growth in seventeen OECD countries over the period 1979-88 and found that U.S. productivity growth is slightly higher than average, all of which is due to technical change.
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