Heteroscedasticity and Non-Monotonic Efficiency Effects of a Stochastic Frontier Model

Journal of Productivity Analysis, 2002, vol. 18, issue 3, 253 pages

Abstract: We consider a model that provides flexible parameterizations of the exogenous influences on inefficiency. In particular, we demonstrate the model's unique property of accommodating non-monotonic efficiency effect. With this non-monotonicity, production efficiency no longer increases or decreases monotonically with the exogenous influence; instead, the relationship can shifts within the sample. Our empirical example shows that variables can indeed have non-monotonic effects on efficiency. Furthermore, ignoring non-monotonicity is shown to yield an inferior estimation of the model, which sometimes results in opposite predictions concerning the data. Copyright Kluwer Academic Publishers 2002

Keywords: stochastic frontiers; heteroscedasticity; non-monotonic effects (search for similar items in EconPapers)
Date: 2002
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Working Paper: Heteroscedasticity and non-monotonic efficiency effects of a stochastic frontier model (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:kap:jproda:v:18:y:2002:i:3:p:241-253

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DOI: 10.1023/A:1020638827640

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