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Estimation of Measures Directed at Management of Factors of Production Inefficiency

Author

Listed:
  • Aivazian, Sergei

    () (CEMI RAS, Moscow, Russia)

  • Afanasiev, Mikhail

    () (CEMI RAS, Moscow, Russia)

Abstract

In development of the stochastic frontier methodology we introduce a concept of achievable production potential generalizing that of the frontier production potential. A model of frontier production potential was built taking in account possibilities of management of factors of inefficiency and the related costs. An estimate of the conditional technical efficiency of production relative to the production potential was obtained. A formal description of measures, directed at management of factors of production inefficiency, and methods of estimation of their technical and economic efficiency are offered. Finally, we present the results of experimental calculations are given

Suggested Citation

  • Aivazian, Sergei & Afanasiev, Mikhail, 2007. "Estimation of Measures Directed at Management of Factors of Production Inefficiency," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 8(4), pages 27-41.
  • Handle: RePEc:ris:apltrx:0021
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    File URL: http://pe.cemi.rssi.ru/pe_2007_04_27-41.pdf
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    References listed on IDEAS

    as
    1. Battese, George E. & Coelli, Tim J., 1988. "Prediction of firm-level technical efficiencies with a generalized frontier production function and panel data," Journal of Econometrics, Elsevier, vol. 38(3), pages 387-399, July.
    2. Afanasiev, Mikhail, 2006. "A Model of the Production Potential with Managed Factors of Inefficiency," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 4(4), pages 74-89.
    3. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-332.
    4. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Aivazian, Sergei & Afanasiev, Mikhail, 2009. "Estimation of the Economic Efficiency of a Shift to the Achievable Production Potential," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 15(3), pages 43-55.
    2. Aivazian , Sergei & Afanasiev , Mikhail & Afanasyev, Alexander, 2009. "Economic Efficiency Estimation of Banks’ Activities Directed at Loans Products Advertisement," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 16(4), pages 46-59.

    More about this item

    Keywords

    production potential; stochastic frontier; production function; technical efficiency; achievable production potential;

    JEL classification:

    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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