Parametric Estimation of Technical and Allocative Inefficiency with Panel Data

Atkinson, Scott E.; Cornwell, Christopher

doi:10.2307/2527099

Cited by 112 publications

(71 citation statements)

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“…27. Atkinson and Cornwell (1994b) consider single production/cost frontier analysis as limited information approaches compared with those full information estimates derived from more complex profit/cost systems. Schmidt and Sickles (1984) study belongs to the former cases.…”

Section: Discussionmentioning

confidence: 99%

“…On the basis of the Cornwell (1993 and1994a) approach for the determination of parametric representations of output and input technical inefficiency measures in a dual cost frontier framework, Atkinson and Cornwell (1994b) derive a translog shadow cost system that permits the analyst to obtain and identify joint parametric estimates of input and producer-specific allocative inefficiency, and producer-specific technical inefficiency. Thereby avoiding the restrictive assumptions of previous approaches concerning the technological functional form and the inefficiency error terms' distributions.…”

Section: Duality Theorymentioning

confidence: 99%

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Economic Efficiency and Frontier Techniques

Zamorano

2004

Journal of Economic Surveys

320

179

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Abstract. Most of the literature related to the measurement of economic efficiency has based its analysis either on parametric or on non-parametric frontier methods. The choice of estimation method has been an issue of debate, with some researchers preferring the parametric and others the non-parametric approach. The aim of this paper is to provide a critical and detailed review of both core frontier methods. In our opinion, no approach is strictly preferable to any other. Moreover, a careful consideration of their main advantages and disadvantages, of the data set utilized, and of the intrinsic characteristics of the framework under analysis will help us in the correct implementation of these techniques. Recent developments in frontier techniques and economic efficiency measurement such as Bayesian techniques, bootstrapping, duality theory and the analysis of sampling asymptotic properties are also considered in this paper.

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Section: Discussionmentioning

confidence: 99%

Section: Duality Theorymentioning

confidence: 99%

Economic Efficiency and Frontier Techniques

Zamorano

2004

Journal of Economic Surveys

320

179

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“…Other profit-and cost-based studies of the U. S. airline industry include, e.g. Sickles (1985), Johnson (1986), Kumbhakar (1992), Atkinson and Cornwell (1994), Baltagi, Griffin and Daniel (1995), and Good, Braniff effectively failed at the start of the sample and, with only 2 usable observations, was left out of the study. Eastern's failure occurred rather late in the sample and lead to the loss of only two years of data.…”

Section: Datamentioning

confidence: 99%

Estimation of long-run inefficiency levels: a dynamic frontier approach

Ahn

Sickles²

2000

Econometric Reviews

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Cornwell, Schmidt, and Sickles (1990) and Kumbhakar (1990), among others, developed stochastic frontier production models which allow firm specific inefficiency levels to change over time. These studies assumed arbitrary restrictions on the short-run dynamics of efficiency levels which have little theoretical justification. Further, the models are inappropriate for estimation of long-run efficiencies. We consider estimation of an alternative frontier model in which firmspecific technical inefficiency levels are autoregressive. This model is particularly useful to examine a potential dynamic link between technical innovations and production inefficiency levels. We apply our methodology to a panel of US airlines.

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“…These models are highly parametric and rely on strong distributional assumptions for identification. Models of this sort have been considered by, among others, Lau and Yotopoulos (1971), Toda (1976), Atkinson and Halvorsen (1980), Lovell and Sickles (1983), Sickles et al (1986), Kumbhakar (1987), Good et al (1991), Atkinson and Cornwell (1994), and Good et al (1997). For an excellent review of this class of models as well as the methods we address herein see Greene (1997) and Lovell and Kumbhakar (2000).…”

Section: The Semiparametric Model and Estimators Of Technical Efficiencymentioning

confidence: 99%

Panel estimators and the identification of firm-specific efficiency levels in parametric, semiparametric and nonparametric settings

Sickles

2005

Journal of Econometrics

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The paper analyzes a number of competing approaches to modeling efficiency in panel studies. The specifications considered include the fixed effects stochastic frontier, the random effects stochastic frontier, the Hausman-Taylor random effects stochastic frontier, and the random and fixed effects stochastic frontier with an AR(1) error. I have summarized the foundations and properties of estimators that have appeared elsewhere and have described the model assumptions under which each of the estimators have been developed. I discuss parametric and nonparametric treatments of time varying efficiency including the BatteseCoelli estimator and linear programming approaches to efficiency measurement. Monte Carlo simulation is used to compare the various estimators and to assess their relative performances under a variety of misspecified settings. A brief illustration of the estimators is conducted using U. S. banking data.

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Parametric Estimation of Technical and Allocative Inefficiency with Panel Data

Cited by 112 publications

References 0 publications

Economic Efficiency and Frontier Techniques

Economic Efficiency and Frontier Techniques

Estimation of long-run inefficiency levels: a dynamic frontier approach

Panel estimators and the identification of firm-specific efficiency levels in parametric, semiparametric and nonparametric settings

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