Title of article :
A zero inefficiency stochastic frontier model
Author/Authors :
Kumbhakar، نويسنده , , Subal C. and Parmeter، نويسنده , , Christopher F. and Tsionas، نويسنده , , Efthymios G. Tsionas، نويسنده ,
Issue Information :
دوفصلنامه با شماره پیاپی سال 2013
Abstract :
Traditional stochastic frontier models impose inefficient behavior on all firms in the sample of interest. If the data under investigation represent a mixture of both fully efficient and inefficient firms then off-the-shelf frontier models are statistically inadequate. We introduce the zero inefficiency stochastic frontier model which can accommodate the presence of both efficient and inefficient firms in the sample. We derive the corresponding log-likelihood function, conditional mean of inefficiency, to estimate observation-specific inefficiency and discuss testing for the presence of fully efficient firms. We provide both simulated evidence as well as an empirical example which demonstrates the applicability of the proposed method.
Keywords :
Full efficiency , Zero-inefficiency , Mixture , Banking
Journal title :
Journal of Econometrics
Journal title :
Journal of Econometrics