Logo
Munich Personal RePEc Archive

Modelling Efficiency Effects in a True Fixed Effects Stochastic Frontier

Paul, Satya and Shankar, Sriram (2018): Modelling Efficiency Effects in a True Fixed Effects Stochastic Frontier.

WarningThere is a more recent version of this item available.
[img]
Preview
PDF
MPRA_paper_87437.pdf

Download (236kB) | Preview

Abstract

This paper proposes a stochastic frontier panel data model which includes time-invariant unobserved heterogeneity along with the efficiency effects. Following Paul and Shankar (2018), the efficiency effects are specified by a standard normal cumulative distribution function of exogenous variables which ensures the efficiency scores to lie in a unit interval. This specification eschews one-sided error term present in almost all the existing inefficiency effects models. The model parameters can be estimated by non-linear least squares after removing the individual effects by the usual within transformation or using non-linear least squares dummy variables (NLLSDV) estimator. The efficiency scores are directly calculated once the model is estimated. An empirical illustration based on widely used panel data on Indian farmers is presented.

Available Versions of this Item

Atom RSS 1.0 RSS 2.0

Contact us: mpra@ub.uni-muenchen.de

This repository has been built using EPrints software.

MPRA is a RePEc service hosted by Logo of the University Library LMU Munich.