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A Poisson Stochastic Frontier Model with Finite Mixture Structure

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  • Drivas, Kyriakos
  • Economidou, Claire
  • Tsionas, Efthymios G.

Abstract

Standard stochastic frontier models estimate log-linear specifications of production technology, represented mostly by production, cost, profit, revenue, and distance frontiers. We develop a methodology for stochastic frontier models of count data allowing for technological and inefficiency induced heterogeneity in the data and endogenous regressors. We derive the corresponding log-likelihood function and conditional mean of inefficiency to estimate technology regime-specific inefficiency. We further provide empirical evidence that demonstrates the applicability of the proposed model.

Suggested Citation

  • Drivas, Kyriakos & Economidou, Claire & Tsionas, Efthymios G., 2014. "A Poisson Stochastic Frontier Model with Finite Mixture Structure," MPRA Paper 57485, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:57485
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    More about this item

    Keywords

    efficiency; Poisson stochastic frontier; mixture; innovation; states;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation

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