IDEAS home Printed from
   My bibliography  Save this paper

A Stochastic Frontier Model with an Effect Stochastic Frontier Models with Endogenous Selection



Government policies are frequently used throughout the world to promote productivity. Some of the policies are designed to enhance production technology, and others are meant to improve production efficiency. In addition, another issue to consider in designing and evaluating policies is whether a mediator is required/effective in achieving the final outcome. To better understand and evaluate the policies, we propose a new stochastic frontier model with a treatment status and a mediator, both of which are allowed to be endogenous. The model allows us to decompose the total program (treatment) effect into the technology and efficiency components, and it also allows us to investigate whether the effect takes place directly from the program or indirectly through a particular mediator. We illustrate the empirical application of the model using data for India to study the effects of large dams on the local districts’ agricultural production.

Suggested Citation

  • Yi-Ting Chen & Yu-Chin Hsu & Hung-Jen Wang, 2014. "A Stochastic Frontier Model with an Effect Stochastic Frontier Models with Endogenous Selection," IEAS Working Paper : academic research 14-A006, Institute of Economics, Academia Sinica, Taipei, Taiwan, revised Sep 2015.
  • Handle: RePEc:sin:wpaper:14-a006

    Download full text from publisher

    File URL:
    Download Restriction: no

    More about this item


    stochastic frontier models; treatment effect; mediation analysis;

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sin:wpaper:14-a006. 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: (HsiaoyunLiu). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.