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Reprint of: Formulation and estimation of stochastic frontier production function models

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  • Aigner, Dennis
  • Lovell, C.A. Knox
  • Schmidt, Peter

Abstract

Previous studies of the so-called frontier production function have not utilized an adequate characterization of the disturbance term for such a model. In this paper we provide an appropriate specification, by defining the disturbance term as the sum of symmetric normal and (negative) half-normal random variables. Various aspects of maximum-likelihood estimation for the coefficients of a production function with an additive disturbance term of this sort are then considered.

Suggested Citation

  • Aigner, Dennis & Lovell, C.A. Knox & Schmidt, Peter, 2023. "Reprint of: Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 234(S), pages 15-24.
    • Handle: RePEc:eee:econom:v:234:y:2023:i:s:p:15-24
    DOI: 10.1016/j.jeconom.2023.01.023
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    References listed on IDEAS

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    1. Afriat, Sidney N, 1972. "Efficiency Estimation of Production Function," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 13(3), pages 568-598, October.
    2. Amemiya, Takeshi, 1973. "Regression Analysis when the Dependent Variable is Truncated Normal," Econometrica, Econometric Society, vol. 41(6), pages 997-1016, November.
    3. Timmer, C P, 1971. "Using a Probabilistic Frontier Production Function to Measure Technical Efficiency," Journal of Political Economy, University of Chicago Press, vol. 79(4), pages 776-794, July-Aug..
    4. Schmidt, Peter, 1976. "On the Statistical Estimation of Parametric Frontier Production Functions," The Review of Economics and Statistics, MIT Press, vol. 58(2), pages 238-239, May.
    5. Richmond, J, 1974. "Estimating the Efficiency of Production," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 15(2), pages 515-521, June.
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