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  • spatial inefficiency REVISED SJPE

    Rights statement: This is the peer reviewed version of the following article: Tsionas, E. G. and Michaelides, P. G. (2016), A Spatial Stochastic Frontier Model with Spillovers: Evidence for Italian Regions. Scottish Journal of Political Economy. doi: 10.1111/sjpe.12081 which has been published in final form at http://onlinelibrary.wiley.com/doi/10.1111/sjpe.12081/abstract . This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.

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A spatial stochastic frontier model with spillovers: evidence for Italian regions

Research output: Contribution to Journal/MagazineJournal articlepeer-review

<mark>Journal publication date</mark>07/2016
<mark>Journal</mark>Scottish Journal of Political Economy
Issue number3
Number of pages15
Pages (from-to)243-257
Publication StatusPublished
Early online date13/06/15
<mark>Original language</mark>English


Efficiency measurement using stochastic frontier models is well established in applied econometrics. However, no published work seems to be available on efficiency analysis using spatial data dealing with possible spatial dependence between regions. This article considers a stochastic frontier model with decomposition of inefficiency into an idiosyncratic and a spatial, spillover component. Exact posterior distributions of parameters are derived, and computational schemes based on Gibbs sampling with data augmentation are proposed to conduct simulation-based inference and efficiency measurement. The new method is illustrated using production data for Italian regions (1970–1993). Clearly, further theoretical and empirical research on the subject would be of great interest.