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Erschienen in:
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2021 | OriginalPaper | Buchkapitel

The Two-Tier Stochastic Frontier Framework (2TSF): Measuring Frontiers Wherever They May Exist

verfasst von : Alecos Papadopoulos

Erschienen in: Advances in Efficiency and Productivity Analysis

Verlag: Springer International Publishing

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Abstract

Stochastic frontier analysis (SFA) focuses mostly on measuring and analyzing matters of efficiency in production and in cost decisions, based on the conceptual and modeling device of a frontier, a boundary beyond which a firm can find itself only by chance, literally. But the existence of frontiers in human activity is a consequence of physical and of economic scarcity: the fact that resources are always less than what we would desire to have available in order to fulfill whatever needs and wants we are able to imagine (or cannot ignore no matter how hard we try). Scarcity creates restrictions, constraints, bounds, boundaries... frontiers. Therefore “frontier modeling” is not constrained to be a specialized tool for efficiency and productivity analysis but can be used as a general methodological approach to formulate and then study economic phenomena (and not only).

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Vorheriges Kapitel Does Xistence of Inefficiency Matter to a Neoclassical Xorcist? Some Econometric Issues in Panel Stochastic Frontier Models
Nächstes Kapitel Individual Efficient Frontiers in Performance Analysis
Fußnoten
1
From a technical point of view one can object to the linear formulation used by the authors, since these parameters should be constrained to be positive, as noted in Parmeter (2018). Specifying an exponential function instead solves this issue.
 
2
We were not able to obtain full English copies for some of the papers from China referenced here, so for them we rely on the available abstracts.
 
3
I would like to thank professor Kristiaan Kerstens for bringing this literature to my attention.
 
4
One may think of cases where the firm will incur a tangible loss (like a contract penalty) if it does not fill a position. In such a case, it could hire the worker at a loss, as long as the latter loss is smaller than the former. But these are rather exceptional cases.
 
5
And, as luck would have it, it contains typographical errors in two formulas in the main text (Eqs. 11 and 12). The corresponding formulas in their Appendix (Eqs. A.10 and A.13) are the correct ones and should be used instead.
 
6
Using the Fast Fourier Transform, Tsionas (2012) estimated a model where both one-sided errors were initially specified as following the Gamma distribution. For the sample he used, he found that the negative component was actually an Exponential random variable, thus ending up with the Gamma-Exponential specification.
 
7
For additional 2TSF specifications with intra-error dependence, see Papadopoulos, Parmeter and Kumbhakar (2020).
 
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Metadaten
Titel
The Two-Tier Stochastic Frontier Framework (2TSF): Measuring Frontiers Wherever They May Exist
verfasst von
Alecos Papadopoulos
Copyright-Jahr
2021
Buch
Advances in Efficiency and Productivity Analysis

Print ISBN: 978-3-030-47105-7

Electronic ISBN: 978-3-030-47106-4

Copyright-Jahr: 2021

DOI
https://doi.org/10.1007/978-3-030-47106-4_8

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