Spatial Stochastic Frontier Models
AbstractThe stochastic frontier model with heterogeneous technical efficiency explained by exogenous variables is augmented with a sparse spatial autoregressive component for a cross-section data, and a spatial-temporal component for a panel data. An estimation procedure that takes advantage of the additivity of the model is proposed, computational advantages over simultaneous maximum likelihood estimation of all parameters is exhibited. The technical efficiency estimates are comparable to existing models and estimation procedures based on maximum likelihood methods. A spatial or spatial-temporal component can improve estimates of technical efficiency in a production frontier that is usually biased downwards.
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Bibliographic InfoPaper provided by East Asian Bureau of Economic Research in its series Microeconomics Working Papers with number 23091.
Date of creation: Jan 2010
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stochastic frontier models; technical efficiency; spatial externalities; spatial-temporal model; backfitting;
Other versions of this item:
- C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
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