Kuosmanen, Timo and Fosgerau, Mogens (2009): Neoclassical versus frontier production models? Testing for the skewness of regression residuals. Published in: Scandinavian Journal of Economics , Vol. 111, No. 2 : pp. 351367.

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Abstract
The empirical literature on production and cost functions is divided into two strands: 1) the neoclassical approach that concentrates on model parameters, 2) the frontier approach that decomposes the disturbance term to a symmetric noise term and a positively skewed inefficiency term. We propose a theoretical justification for the skewness of the inefficiency term, arguing that this skewness is the key testable hypothesis of the frontier approach. We propose to test the regression residuals for skewness to distinguish the two competing approaches. Our test builds directly upon the asymmetry of regression residuals and does not require any prior distributional assumptions.
Item Type:  MPRA Paper 

Original Title:  Neoclassical versus frontier production models? Testing for the skewness of regression residuals 
Language:  English 
Keywords:  Firms and production; Frontier estimation; Hypotheses testing; Production function; Productive efficiency analysis 
Subjects:  C  Mathematical and Quantitative Methods > C1  Econometric and Statistical Methods and Methodology: General > C14  Semiparametric and Nonparametric Methods: General C  Mathematical and Quantitative Methods > C1  Econometric and Statistical Methods and Methodology: General > C12  Hypothesis Testing: General A  General Economics and Teaching > A1  General Economics > A10  General D  Microeconomics > D2  Production and Organizations > D24  Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity 
Item ID:  24208 
Depositing User:  Mogens Fosgerau 
Date Deposited:  03. Aug 2010 07:36 
Last Modified:  16. Feb 2013 01:05 
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URI:  http://mpra.ub.unimuenchen.de/id/eprint/24208 