Skip to main content
Disciplines
Automotive Business IT + Informatics Construction + Real Estate Electrical Engineering + Electronics Energy + Sustainability Insurance + Risk Finance + Banking Management + Leadership Marketing + Sales Mechanical Engineering + Materials
Events
DE
EN
Books
Journals
Topic Page
Marketing
Start single access now
Access for companies
EXTENDED SEARCH
Log in
Top
Empirical Economics
Published in: Empirical Economics 1/2021

19-08-2020

A hierarchical panel data stochastic frontier model for the estimation of stochastic metafrontiers

Authors: Christine Amsler, Yi Yi Chen, Peter Schmidt, Hung Jen Wang

Published in: Empirical Economics | Issue 1/2021

Log in

Activate our intelligent search to find suitable subject content or patents.

search-config
loading …

Abstract

This paper proposes a stochastic frontier model with three composed errors, and therefore six error components. As in the metafrontier literature, firms belong to groups with a group-specific frontier. A firm has a level of short-run and long-run inefficiency relative to its group-specific frontier, as in existing models with two composed errors and four error components. But now there is also a group-specific inefficiency, that is, a shortfall of the group-specific frontier from the best practice metafrontier. The paper shows how to estimate this model and how to extract predictions of the various inefficiencies.
previous article Alternative estimation approaches for the factor augmented panel data model with small T
next article Gravity models of interprovincial migration flows in Canada with hierarchical multifactor structure

Dont have a licence yet? Then find out more about our products and how to get one now:

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

  • über 67.000 Bücher
  • über 340 Zeitschriften

aus folgenden Fachgebieten:

  • Bauwesen + Immobilien
  • Business IT + Informatik
  • Finance + Banking
  • Management + Führung
  • Marketing + Vertrieb
  • Versicherung + Risiko




Jetzt Wissensvorsprung sichern!

inform now

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

  • über 102.000 Bücher
  • über 537 Zeitschriften

aus folgenden Fachgebieten:

  • Automobil + Motoren
  • Bauwesen + Immobilien
  • Business IT + Informatik
  • Elektrotechnik + Elektronik
  • Energie + Nachhaltigkeit
  • Finance + Banking
  • Management + Führung
  • Marketing + Vertrieb
  • Maschinenbau + Werkstoffe
  • Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

inform now
Appendix
Available only for authorised users
Literature
Amsler C, O’Donnell CJ, Schmidt P. Stochastic metafrontiers. Econom Rev. 2017;36:1007–20.CrossRef
Amsler C, Prokhorov A, Schmidt P. Using copulas to model time dependence in stochastic frontier models. Econom Rev. 2014;33:497–522.CrossRef
Azzalini A. A class of distributions which includes the normal ones. Scand J Stat. 1985;12:171–8.
Battese GE, Rao DSP. Technology gap, efficiency, and a stochastic metafrontier function. Int J Bus Econ. 2002;1:87–93.
Battese GE, Rao DSP, O’Donnell CJ. A metafrontier production function for estimation of technical efficiencies and technology gaps for firms operating under different technologies. J Prod Anal. 2004;21:91–103.CrossRef
Colombi R, Martini G, Vittadini G (2011) A stochastic frontier model with short-run and long-run inefficiency random effects. Working Paper, University of Bergamo.
Colombi R, Kumbhakar SC, Martini G, Vittadini G. Closed skew normality in stochastic frontiers with individual effects and long/short-run inefficiency. J Prod Anal. 2014;42:123–36.CrossRef
Domínguez-Molina JA, González-Farías G, Ramos-Quiroga R (2003) Skew normality in stochastic frontier analysis. Commun Tech. I-03-18, 1–13.
Filippini M, Greene W. Persistent and transient productive inefficiency: a maximum simulated likelihood approach. J Prod Anal. 2016;45:187–96.CrossRef
Fuller WA, Battese GE. Transformations for estimation of linear models with nested-error structure. J Am Stat Assoc. 1973;68:626–32.CrossRef
González-Farías G, Domínguez-Molina JA, Gupta AK. Additive properties of skew normal random vectors. J Stat Plan Inference. 2004a;126:521–34.CrossRef
González-Farías G, Domínguez-Molina JA, Gupta AK. The closed skew normal distribution. In: Genton M, editor. Skew elliptical distributions and their applications: a journey beyond normality. Boca Raton: Chapman and Hall; 2004b.
Hayami Y, Ruttan VW. Agricultural development: an international perspective. Baltimore: The Johns Hopkins University Press; 1971.
Hayami Y, Ruttan VW. Agricultural development: an international perspective. Revised and expanded ed. Baltimore: The Johns Hopkins University Press; 1985.
Kim J-S, Frees EW. Multilevel modelling with correlated effects. Psychometrika. 2007;72:505–33.CrossRef
Kumbhakar SC, Lien G, Hardaker JB. Technical efficiency in competing panel data models. J Prod Anal. 2014;41:321–37.CrossRef
Lai H-P, Kumbhakar SC. Panel data stochstic frontier model with determinants of persistent and transient inefficiency. Eur J Oper Res. 2018;271:746–55.CrossRef
Lau LJ, Yotopoulos PA. The meta-production function approach to technological change in world agriculture. J Dev Econ. 1989;31:241–69.CrossRef
Li Q, Racine J. Nonparametric econometrics: theory and practice. London: Princeton University Press; 2006.
Matyas L, editor. The econometrics of multi-dimensional panels. Berlin: Springer; 2017.
Moreira V, Bravo-Ureta B. Technical efficiency and metatechnology ratios for dairy farms in three southern cone countries: a stochastic meta-frontier model. J Prod Anal. 2010;33:33–45.CrossRef
O’Donnell CJ, Rao DSP, Battese GE. Metafrontier frameworks for the study of firm-level efficiencies and technology ratios. Empir Econom. 2008;34:231–55.CrossRef
Pitt MM. Farm-level fertilizer demand in Java: a meta-production function approach. Am J Agric Econ. 1983;65:502–8.CrossRef
Raudenbush SW, Bryk AS. Hierarchical linear models: applications and data analysis methods. 2nd ed. London: Sage Publications; 2002.
Tsionas EG, Kumbhakar SC. Firm heterogeneity, persistent and transient technical inefficiency: a generalized true random effects model. J Appl Econom. 2014;29:110–32.CrossRef
Villano R, Bravo-Ureta B, Solis D, Fleming E. Modern rice technologies and productivity in the Philippines: disentangling technology from managerial gaps. J Agric Econ. 2015;66:129–54.CrossRef
Wooldridge JM. Econometric analysis of cross section and panel data. 2nd ed. Cambridge: MIT Press; 2010.
Yang Y, Schmidt P (2020) An econometric approach to the estimation of multi-level models. J Econom. (forthcoming).
Metadata
Title
A hierarchical panel data stochastic frontier model for the estimation of stochastic metafrontiers
Authors
Christine Amsler
Yi Yi Chen
Peter Schmidt
Hung Jen Wang
Publication date
19-08-2020
Publisher
Springer Berlin Heidelberg
Published in
Empirical Economics / Issue 1/2021
Print ISSN: 0377-7332
Electronic ISSN: 1435-8921
DOI
https://doi.org/10.1007/s00181-020-01929-w

Other articles of this Issue 1/2021

Empirical Economics 1/2021 Go to the issue

OriginalPaper

General diagnostic tests for cross-sectional dependence in panels

OriginalPaper

Productive efficiency in processing social security disability claims: a look back at the 1989–95 surge

OriginalPaper

The role of price spillovers: what is different in China

EditorialNotes

Essays in honor of Professor Badi H Baltagi

OriginalPaper

Modal regression for fixed effects panel data

OriginalPaper

Can a time-varying structure provide a more robust panel construction of counterfactuals-straitjacket or straitjackets?