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Black-Box Frontiers and Implications for Development Policy - Theoretical Considerations

Author

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  • Sauer, Johannes
  • Frohberg, Klaus
  • Hockmann, Heinrich

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 addresses stochastic efficiency measurement by critically reviewing the theoretical consistency of recently published technical efficiency estimates with respect to economic development. 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.

Suggested Citation

  • Sauer, Johannes & Frohberg, Klaus & Hockmann, Heinrich, 2004. "Black-Box Frontiers and Implications for Development Policy - Theoretical Considerations," Discussion Papers 18772, University of Bonn, Center for Development Research (ZEF).
  • Handle: RePEc:ags:ubzefd:18772
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    File URL: http://ageconsearch.umn.edu/record/18772/files/dp040092.pdf
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    Cited by:

    1. Sauer, Johannes & Tchale, Hardwick, 2006. "Alternative Soil Fertility Management Options in Malawi - An Economic Analysis," 2006 Annual meeting, July 23-26, Long Beach, CA 21423, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Sauer, Johannes & Abdallah, Jumanne M., 2007. "Forest diversity, tobacco production and resource management in Tanzania," Forest Policy and Economics, Elsevier, vol. 9(5), pages 421-439, January.
    3. Tchale, Hardwick & Sauer, Johannes, 2006. "Soil Fertility Management And Agricultural Productivity In Malawi," 46th Annual Conference, Giessen, Germany, October 4-6, 2006 14954, German Association of Agricultural Economists (GEWISOLA).

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