Introducing Environmental Variables in Nonparametric Frontier Models: a Probabilistic Approach
AbstractThis paper proposes a general formulation of a nonparametric frontier model introducing external environmental factors that might influence the production process but are neither inputs nor outputs under the control of the producer. A representation is proposed in terms of a probabilistic model which defines the data generating process. Our approach extends the basic ideas from Cazals et al. (2002) to the full multivariate case. We introduce the concepts of conditional efficiency measure and of conditional efficiency measure of order-m. Afterwards we suggest a practical way for computing the nonparametric estimators. Finally, a simple methodology to investigate the influence of these external factors on the production process is proposed. Numerical illustrations through some simulated examples and through a real data set on Mutual Funds show the usefulness of the approach. Copyright Springer Science+Business Media, Inc. 2005
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Bibliographic InfoArticle provided by Springer in its journal Journal of Productivity Analysis.
Volume (Year): 24 (2005)
Issue (Month): 1 (09)
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Web page: http://www.springerlink.com/link.asp?id=100296
production function; frontier; nonparametric estimation; environmental factors; robust estimation;
Other versions of this item:
- Cinzia Daraio & Leopold Simar, 2003. "Introducing Environmental Variables in Nonparametric Frontier Models: a Probabilistic Approach," LEM Papers Series 2003/17, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
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Open Access publications from University of Toulouse 1 Capitole
http://neeo.univ-tlse1.fr, University of Toulouse 1 Capitole.
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