Stochastic frontier models using the Generalized Exponential distribution

Posted: November 24, 2020 in Research, Research papers
Tags: , , ,

UPDATE: The paper went on-line on February 2, 2021, https://link.springer.com/article/10.1007/s11123-020-00591-9

The paper “Stochastic frontier models using the Generalized Exponential distribution” has just been approved for publication in the Journal of Productivity Analysis.

Abstract: We present a new, single-parameter distributional specification for the one-sided error components in single-tier and two-tier stochastic frontier models. The distribution has its mode away from zero, and can represent cases where the most likely outcome is non-zero inefficiency. We present the necessary formulas for estimating production, cost and two-tier stochastic frontier models in logarithmic form. We pay particular attention to the use of the conditional mode as a predictor of individual inefficiency. We use simulations to assess the performance of existing models when the data include an inefficiency term with non-zero mode, and we also contrast the conditional mode to the conditional expectation as measures of individual (in)efficiency.

Download the pre-print here.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s