Closed-skew normality in stochastic frontiers with individual effects and long/short-run efficiency

Colombi, Roberto; Kumbhakar, Subal C.; Martini, Gianmaria; Vittadini, Giorgio

doi:10.1007/s11123-014-0386-y

Cited by 218 publications

(256 citation statements)

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“…Starting from the Colombi et al (2014) SF model, we introduce a new element of analysis: the determinants of inefficiency. We consider the following hospital production frontier model:…”

Section: A Closed Skew-normal Sf Model With Determinants Of Transientmentioning

confidence: 99%

“…Although most SF models fail to consider simultaneously unobserved heterogeneity and persistent and transient inefficiencies, Colombi, Kumbhakar, Martini, and Vittadini (2014) recently presented an SF model that includes all these components in the error term, together with the normally distributed random shock. The possibility to disentangle the two types of inefficiencies, hospital unobserved heterogeneity and random shocks, comes from previous results (Dominguez-Molina, Gonzáles-Farías, & Ramos-Quiroga, 2004;Gonzáles-Farías, Dominguez-Molina, & Gupta, 2004).…”

Section: Introductionmentioning

confidence: 99%

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Determinants of transient and persistent hospital efficiency: The case of Italy

2017

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SummaryIn this paper, we extend the 4-random-component closed skew-normal stochastic frontier model by including exogenous determinants of hospital persistent (long-run) and transient (short-run) inefficiency, separated from unobserved heterogeneity. We apply this new model to a dataset composed by 133 Italian hospitals during the period 2008-2013. We show that average total inefficiency is about 23%, higher than previous estimates; hence, a model where the different types of inefficiency and hospital unobserved characteristics are not confounded allows us to get less biased estimates of hospital inefficiency. Moreover, we find that transient efficiency is more important than persistent efficiency, as it accounts for 60% of the total one. Last, we find that ownership (for-profit hospitals are more transiently inefficient and less persistently inefficient than not-for-profit ones, whereas public hospitals are less transiently inefficient than not-for-profit ones), specialization (specialized hospitals are more transiently inefficient than general ones; i.e., there is evidence of scope economies in short-run efficiency), and size (large-sized hospitals are better than medium and small ones in terms of transient inefficiency) are determinants of both types of inefficiency, although we do not find any statistically significant effect of multihospital systems and teaching hospitals. KEYWORDSclosed skew-normal stochastic frontier, determinants of in efficiency, hospital persistent and transient efficiency

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“…Starting from the Colombi et al (2014) SF model, we introduce a new element of analysis: the determinants of inefficiency. We consider the following hospital production frontier model:…”

Section: A Closed Skew-normal Sf Model With Determinants Of Transientmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Determinants of transient and persistent hospital efficiency: The case of Italy

2017

Self Cite

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“…The models proposed by Kumbhakar (1991), Kumbhakar and Heshmati (1995), Hjalmarsson (1993, 1995) treat firm effects as persistent inefficiency and include another component to capture time varying technical inefficiency and thus do not account for the heterogeneity effects. The task of estimating these two inefficiencies while also allowing for firm-effects heterogeneity is undertaken in Tsionas and Kumbhakar (2012) and Colombi et al (2014). The model proposed by these authors can be written as (see Kumbhakar et al, 2012): 10 Colombi et al (2014) have clarified the difference between persistent and time-varying inefficiencies by giving an example of a hospital which has more capacity (beds) than the optimal required level, but downsizing may be a long-run process due to social pressure.…”

Section: (Iii) Models With Persistent and Time Varying Inefficienciesmentioning

confidence: 99%

“…However, these and couple of other studies which explicitly account for 'persistent' (time-invariant) and 'transient' (time varying) inefficiencies, (eg. Colombi et al, 2014) utilise JLMS transformation (Jondrow et al, 1982) to derive the inefficiency scores. As shown in Schmidt and Sickles (1984) the JLMS estimator is not consistent in that the conditional mean or mode of the random variable representing inefficiency component (u) given the composite error (v-u) term, that is, u v u − never approaches u even when the number of cross-sectional units tends to infinity.…”

Section: Introductionmentioning

confidence: 99%

Modelling Efficiency Effects in a True Fixed Effects Stochastic Frontier

Paul

Shankar

2018

SSRN Journal

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“…The contribution of this paper is two-fold: firstly, we estimate the persistent and transient efficiency in electricity consumption of a large sample of Swiss households and demonstrate an application of the newly developed GTREM model (Colombi et al, 2014;Filippini and Greene, 2016) that estimates both types of efficiency conveniently by a simulated maximum likelihood approach. We benefit from a unique panel dataset covering a five-year period collected via a household survey conducted in 2015.…”

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confidence: 99%

The Role of Energy and Investment Literacy for Residential Electricity Demand and End-use Efficiency

et al. 2017

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractThis paper estimates the level of transient and persistent efficiency in the use of electricity in Swiss households using the newly developed generalized true random effects model (GTREM). An unbalanced panel dataset of 1, 994 Swiss households from 2010 to 2014 collected via a household survey is used to estimate an electricity demand frontier function. We further investigate whether energy and investment literacy have an influence on the household electricity consumption. The results show significant inefficiencies in the use of electricity among Swiss households, both transient (11%) and persistent (22%). We note that the high persistent inefficiency is indicative of structural problems faced by households and systematic behavioral shortcomings in residential electricity consumption. These results indicate a considerable potential for electricity savings and thus reaching the reduction targets defined by the Swiss federal council as part of the Energy Strategy 2050, wherein end-use efficiency improvement is one of the main pillars. The results support a positive role of energy and, in particular, investment literacy in reducing household electricity consumption. Policies targeting an improvement of these attributes could help to improve efficiency in the use of energy within households.

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Closed-skew normality in stochastic frontiers with individual effects and long/short-run efficiency

Cited by 218 publications

References 30 publications

Determinants of transient and persistent hospital efficiency: The case of Italy

Determinants of transient and persistent hospital efficiency: The case of Italy

Modelling Efficiency Effects in a True Fixed Effects Stochastic Frontier

The Role of Energy and Investment Literacy for Residential Electricity Demand and End-use Efficiency

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