This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Stochastic efficiency measurement: The curse of theoretical consistency

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Johannes Sauer (Royal Veterinary and Agricultural University, Copenhagen (KVL))
Klaus Frohberg (Center for Development Research, University of Bonn)
Henrich Hockmann (Institute for Agricultural Development in Central and Eastern Europe, Halle)

Additional information is available for the following registered author(s):

Abstract

The availability of efficiency estimation software – freely distributed via the internet and relatively easy to use – recently inflated the number of corresponding applications. The resulting efficiency estimates are used without a critical assessment with respect to the literature on theoretical consistency, flexibility and the choice of the appropriate functional form. The robustness of policy suggestions based on inferences from efficiency measures nevertheless crucially depends on theoretically well-founded estimates. This paper adresses stochastic efficiency measurement by critically reviewing the theoretical consistency of recently published technical efficiency estimates. The results confirm the need for a posteriori checking the regularity of the estimated frontier by the researcher and, if necessary, the a priori imposition of the theoretical requirements.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www4.cema.edu.ar/pjae/m/123SauFrohHock200605
File Format: application/pdf
File Function:
Download Restriction: Access to full text is restricted to subscribers. Individual articles may be purchased through PayPal.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Publisher Info
Article provided by Universidad del CEMA in its journal Journal of Applied Economics.

Volume (Year): IX (2006)
Issue (Month): (May)
Pages: 139-166
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:cem:jaecon:v:9:y:2006:n:1:p:139-166

Contact details of provider:
Postal: Av. C�rdoba 374, (C1054AAP) Capital Federal
Phone: (5411) 6314-3000
Fax: (5411) 4314-1654
Email:
Web page: http://www.cema.edu.ar/publicaciones/jae.html
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: (Valeria Dowding).

Related research
Keywords: functional form; stochastic efficiency analysis; theoretical consistency;

Find related papers by JEL classification:
C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
D24 - Microeconomics - - Production and Organizations - - - Production; Capital and Total Factor Productivity; Capacity
Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Bernhard Brümmer & Jens-Peter Loy, 2000. "The Technical Efficiency Impact of Farm Credit Programmes: A Case Study of Northern Germany," Journal of Agricultural Economics, Blackwell Publishing, vol. 51(3), pages 405-418. [Downloadable!] (restricted)
  2. Diewert, Walter E & Wales, Terence J, 1987. "Flexible Functional Forms and Global Curvature Conditions," Econometrica, Econometric Society, vol. 55(1), pages 43-68, January. [Downloadable!] (restricted)
    Other versions:
  3. Ryan, David L & Wales, Terence J, 1998. "A Simple Method for Imposing Local Curvature in Some Flexible Consumer-Demand Systems," Journal of Business & Economic Statistics, American Statistical Association, vol. 16(3), pages 331-38, July.
    Other versions:
  4. David L. Ryan & Terence J. Wales, 1999. "Flexible And Semiflexible Consumer Demands With Quadratic Engel Curves," The Review of Economics and Statistics, MIT Press, vol. 81(2), pages 277-287, May. [Downloadable!] (restricted)
    Other versions:
  5. Dimitris Christopoulos & John Loizides & Efthymios G. Tsionas, 2001. "Efficiency in European railways: Not as inefficient as one might think," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 63-88, May. [Downloadable!]
  6. George C. Bitros & Efthymios G. Tsionas, 2004. "A Consistent Approach to Cost Efficiency Measurement," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 66(1), pages 49-69, 02. [Downloadable!] (restricted)
    Other versions:
  7. Dek Terrell, 1995. "Flexibility and regularity properties of the asymptotically ideal production model," Econometric Reviews, Taylor and Francis Journals, vol. 14(1), pages 1-17. [Downloadable!] (restricted)
  8. Diewert, W. E., 1973. "Functional forms for profit and transformation functions," Journal of Economic Theory, Elsevier, vol. 6(3), pages 284-316, June. [Downloadable!] (restricted)
  9. Kumbhakar, Subal C, 1989. "Estimation of Technical Efficiency Using Flexible Functional Form and Panel Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 7(2), pages 253-58, April.
  10. Gallant, A. Ronald & Golub, Gene H., 1984. "Imposing curvature restrictions on flexible functional forms," Journal of Econometrics, Elsevier, vol. 26(3), pages 295-321, December. [Downloadable!] (restricted)
  11. Terrell, Dek, 1996. "Incorporating Monotonicity and Concavity Conditions in Flexible Functional Forms," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(2), pages 179-94, March-Apr. [Downloadable!] (restricted)
  12. William A. Barnett & Milka Kirova & Meenakshi Pasupathy, 1994. "Estimating policy-invariant deep parameters in the financial sector when risk and growth matter," Proceedings, Federal Reserve Bank of Cleveland, pages 1402-1440.
    Other versions:
  13. Fuss, Melvyn & McFadden, Daniel, 1978. "Production Economics: A Dual Approach to Theory and Applications (I): The Theory of Production," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, volume 1, number fuss1978. [Downloadable!]
  14. Edward R. Morey, 1986. "An Introduction to Checking, Testing, and Imposing Curvature Properties: The True Function and the Estimated Function," Canadian Journal of Economics, Canadian Economics Association, vol. 19(2), pages 207-35, May. [Downloadable!] (restricted)
  15. Diewert, W E, 1974. "Functional Forms for Revenue and Factor Requirements Functions," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 15(1), pages 119-30, February. [Downloadable!] (restricted)
  16. Barnett, William A., 2002. "Tastes and technology: curvature is not sufficient for regularity," Journal of Econometrics, Elsevier, vol. 108(1), pages 199-202, May. [Downloadable!] (restricted)
  17. Ryan, David L. & Wales, Terence J., 2000. "Imposing local concavity in the translog and generalized Leontief cost functions," Economics Letters, Elsevier, vol. 67(3), pages 253-260, June. [Downloadable!] (restricted)
  18. Johannes Sauer & Klaus Frohberg, 2007. "Allocative efficiency of rural water supply – a globally flexible SGM cost frontier," Journal of Productivity Analysis, Springer, vol. 27(1), pages 31-40, February. [Downloadable!] (restricted)
  19. Alvarez, Antonio & Arias, Carlos, 2004. "Technical efficiency and farm size: a conditional analysis," Agricultural Economics, Blackwell, vol. 30(3), pages 241-250, May. [Downloadable!] (restricted)
  20. Lau, Lawrence J., 1986. "Functional forms in econometric model building," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 3, chapter 26, pages 1515-1566 Elsevier. [Downloadable!] (restricted)
  21. Blackorby, Charles & Diewert, W E, 1979. "Expenditure Functions, Local Duality, and Second Order Approximations," Econometrica, Econometric Society, vol. 47(3), pages 579-601, May. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Holger Seebens & Johannes Sauer, 2007. "Bargaining power and efficiency-rural households in Ethiopia," Journal of International Development, John Wiley & Sons, Ltd., vol. 19(7), pages 895-918. [Downloadable!]
Statistics
Access and download statistics

Did you know? A few items listed on IDEAS are over 2000 years old!

This page was last updated on 2009-11-20.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.