Neoclassical versus frontier production models? Testing for the skewness of regression residuals
The empirical literature on production and cost functions is divided into two strands: 1) the neoclassical approach that concentrates on model parameters, 2) the frontier approach that decomposes the disturbance term to a symmetric noise term and a positively skewed inefficiency term. We propose a theoretical justification for the skewness of the inefficiency term, arguing that this skewness is the key testable hypothesis of the frontier approach. We propose to test the regression residuals for skewness to distinguish the two competing approaches. Our test builds directly upon the asymmetry of regression residuals and does not require any prior distributional assumptions.
|Date of creation:||2009|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: https://mpra.ub.uni-muenchen.de
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.:
- Bai, Jushan & Ng, Serena, 2001. "A consistent test for conditional symmetry in time series models," Journal of Econometrics, Elsevier, vol. 103(1-2), pages 225-258, July.
- Alicia Pérez Alonso, 2006.
"A Bootstrap Approach To Test The Conditional Symmetry In Time Series Models,"
Working Papers. Serie AD
2006-18, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- Perez-Alonso, Alicia, 2007. "A bootstrap approach to test the conditional symmetry in time series models," Computational Statistics & Data Analysis, Elsevier, vol. 51(7), pages 3484-3504, April.
- Fan, Yanqin & Li, Qi & Weersink, Alfons, 1996. "Semiparametric Estimation of Stochastic Production Frontier Models," Journal of Business & Economic Statistics, American Statistical Association, vol. 14(4), pages 460-68, October.
- Kuosmanen, Timo & Post, Thierry & Scholtes, Stefan, 2007. "Non-parametric tests of productive efficiency with errors-in-variables," Journal of Econometrics, Elsevier, vol. 136(1), pages 131-162, January.
- Varian, Hal R., 1985. "Non-parametric analysis of optimizing behavior with measurement error," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 445-458.
- Timo Kuosmanen & Mika Kortelainen, 2012. "Stochastic non-smooth envelopment of data: semi-parametric frontier estimation subject to shape constraints," Journal of Productivity Analysis, Springer, vol. 38(1), pages 11-28, August.
- Jondrow, James & Knox Lovell, C. A. & Materov, Ivan S. & Schmidt, Peter, 1982. "On the estimation of technical inefficiency in the stochastic frontier production function model," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 233-238, August.
- Timo Kuosmanen, 2008. "Representation theorem for convex nonparametric least squares," Econometrics Journal, Royal Economic Society, vol. 11(2), pages 308-325, 07.
- Qiwei Yao & Rob J. Hyndman, 2002.
"Nonparametric estimation and symmetry tests for conditional density functions,"
LSE Research Online Documents on Economics
6092, London School of Economics and Political Science, LSE Library.
- Hyndman, R.J. & Yao, Q., 1998. "Nonparametric Estimation and Symmetry Tests for Conditional Density Functions," Monash Econometrics and Business Statistics Working Papers 17/98, Monash University, Department of Econometrics and Business Statistics.
- Hanoch, Giora & Rothschild, Michael, 1972. "Testing the Assumptions of Production Theory: A Nonparametric Approach," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 256-75, March-Apr.
- Varian, Hal R, 1984. "The Nonparametric Approach to Production Analysis," Econometrica, Econometric Society, vol. 52(3), pages 579-97, May.
- Kuosmanen, Timo, 2006. "Stochastic Nonparametric Envelopment of Data: Combining Virtues of SFA and DEA in a Unified Framework," Discussion Papers 11864, MTT Agrifood Research Finland.
- Ondrich, Jan & Ruggiero, John, 2001. "Efficiency measurement in the stochastic frontier model," European Journal of Operational Research, Elsevier, vol. 129(2), pages 434-442, March.
- Poitras, Geoffrey, 2006. "More on the correct use of omnibus tests for normality," Economics Letters, Elsevier, vol. 90(3), pages 304-309, March.
- 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 568-98, October.
- Godfrey, L. G. & Orme, C. D., 1991. "Testing for skewness of regression disturbances," Economics Letters, Elsevier, vol. 37(1), pages 31-34, September.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:24208. 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: (Ekkehart Schlicht)
If references are entirely missing, you can add them using this form.