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Estimation of nonparametric inefficiency effects stochastic frontier models with an application to British manufacturing

Research output: Contribution to Journal/MagazineJournal articlepeer-review

Published
<mark>Journal publication date</mark>09/2009
<mark>Journal</mark>Economic Modelling
Issue number5
Volume26
Number of pages6
Pages (from-to)904-909
Publication StatusPublished
<mark>Original language</mark>English

Abstract

The purpose of this paper is to propose a simple stochastic frontier model with a non-parametric specification for covariates affecting the mean of technical inefficiency. We derive a simple two-step semiparametric estimation procedure to estimate the frontier parameters as well as the mean of the technical inefficiency. The consistency of the estimator and its asymptotic normality are shown. The proposed method is illustrated using a large panel data set of British manufacturing firms.