A Stochastic Frontier Model with short-run and long-run inefficiency random effects
This paper presents a new stochastic frontier model for panel data. The model takes into account firm unobservable heterogeneity and short-run and long-run sources of inefficiency. Each of these features is modeled by a specific random effect. In this way, firms’ latent heterogeneity is not wrongly modeled as inefficiency, and it is possible to disentangle a time-persistent component from the total inefficiency. Under reasonable assumptions, we show that the closed-skew normal distribution allows us to derive both the log-likelihood function of the model and the posterior expected values of the random effects. The new model is compared with nested models by analyzing the efficiency of firms belonging to different sectors.
|Date of creation:||2011|
|Date of revision:|
|Contact details of provider:|| Postal: viale Marconi 5, 24044 Dalmine|
Web page: http://www.unibg.it/struttura/en_struttura.asp?cerca=en_dige_intro
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Berta, P & Callea, G & Martini, G & Vittadini, G, 2009.
"The effects of upcoding, cream skimming and readmissions on the Italian hospitals efficiency: a population–based investigation,"
17671, University Library of Munich, Germany.
- Berta, Paolo & Callea, Giuditta & Martini, Gianmaria & Vittadini, Giorgio, 2010. "The effects of upcoding, cream skimming and readmissions on the Italian hospitals efficiency: A population-based investigation," Economic Modelling, Elsevier, vol. 27(4), pages 812-821, July.
- Paolo Malighetti & Gianmaria Martini & Stefano Paleari & Renato Redondi, 2007. "An Empirical Investigation on the Efficiency, Capacity and Ownership of Italian Airports," Working Papers 0703, Department of Economics and Technology Management, University of Bergamo.
When requesting a correction, please mention this item's handle: RePEc:brh:wpaper:1101. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (University of Bergamo Library)
If references are entirely missing, you can add them using this form.