Stationary Points for Parametric Stochastic Frontier Models

Stationary Points for Parametric Stochastic Frontier Models

The results of Waldman (1982) on the Normal-Half Normal stochastic frontier model are generalized using the theory of the Dirac delta (Dirac, 1930), and distribution-free conditions are established to ensure a stationary point in the likelihood as the variance of the inefficiency distribution goes to zero. Stability of the stationary point and "wrong skew" results are derived or simulated for c...

Stochastic Non-Parametric Frontier Analysis

In this paper we develop an approach that synthesizes the best features of the two main methods in the estimation of production efficiency. Specically, our approach first allows for statistical noise, similar to Stochastic frontier analysis, and second, it allows modeling multiple-inputs-multiple-outputs technologies without imposing parametric assumptions on production relationship, similar to...

Comparative Analysis of Stochastic Frontier Partially non-parametric and Stochastic Frontier Parametric Methods Case Study: Measuring Cost Efficiency in Wheat Production in Iran

Stochastic Frontier Models

A Stationary Point for the Stochastic Frontier Likelihood

The specification and estimation of frontier or envelope functions has been a concern of econometricians for some time. The subject became of widespread interest with the introduction of a particularly attractive formulation of the model, the stochastic frontier of Aigner, Love11 and Schmidt (ALS) (1977) and Meeusen and Van den Broeck (1977). In that model, the random disturbance is composed of...