Wang, HungJen (2006): Stochastic frontier models. Published in: invited article for The New Palgrave Dictionary of Economics, 2nd edition, Palgrave Macmillan (2007)

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Abstract
The stochastic frontier model was first proposed in the context of production function estimation to account for the effect of technical inefficiency. The inefficiency causes actual output to fall below the potential level (that is, the production frontier) and also raises production cost above the minimum level (that is, the cost frontier). Recent applications of the model are found in many fields of study including labour, finance, and economic growth. In these applications, the observed outcome (of wages, investment, and so on) is modelled as being deviating from a frontier level in one direction owing to factors such as information asymmetry.
Item Type:  MPRA Paper 

Original Title:  Stochastic frontier models 
Language:  English 
Keywords:  aftermarkets; allocative inefficiency; convergence; copulas; cost functions; duality; financing constraints; fixedeffect panel estimators; labour market search models; likelihood functions; nonparametric estimation; production function estimation; production functions; semiparametric estimation; stochastic cost frontiers; stochastic frontier models; technical inefficiency; technological catchup; truncated distributions 
Subjects:  C  Mathematical and Quantitative Methods > C1  Econometric and Statistical Methods and Methodology: General > C13  Estimation: General C  Mathematical and Quantitative Methods > C1  Econometric and Statistical Methods and Methodology: General > C14  Semiparametric and Nonparametric Methods: General C  Mathematical and Quantitative Methods > C2  Single Equation Models; Single Variables > C24  Truncated and Censored Models; Switching Regression Models 
Item ID:  31079 
Depositing User:  HungJen Wang 
Date Deposited:  25. May 2011 13:35 
Last Modified:  17. Feb 2013 05:37 
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URI:  http://mpra.ub.unimuenchen.de/id/eprint/31079 