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Nonparametric estimation of allocative efficiency using indirect production theory: Application to container ports in Norway

Author

Listed:
  • Kenneth Løvold Rødseth

    (Institute of Transport Economics – Norwegian Centre for Transport Research)

  • Rasmus Bøgh Holmen

    (Institute of Transport Economics – Norwegian Centre for Transport Research)

  • Timo Kuosmanen

    (University of Turku)

  • Halvor Schøyen

    (University of South-Eastern Norway
    Kristiania University College)

Abstract

Adaption to prices is an important feature of productivity development. This paper proposes an extension of the StoNED model to accommodate estimation of allocative efficiency. It demonstrates how indirect production theory is suited for assessing allocative efficiency and helps alleviating the curse of dimensionality for stochastic nonparametric estimators compared to conventional measures of allocative efficiency. Furthermore, the paper elaborates on the appropriate cost of capital for the estimation of allocative efficiency. The proposed model framework is utilized to study allocative efficiency of Norwegian container ports, thereby adding to the literature on seaport terminal efficiency studies.

Suggested Citation

  • Kenneth Løvold Rødseth & Rasmus Bøgh Holmen & Timo Kuosmanen & Halvor Schøyen, 2024. "Nonparametric estimation of allocative efficiency using indirect production theory: Application to container ports in Norway," Journal of Productivity Analysis, Springer, vol. 62(3), pages 365-377, December.
    • Handle: RePEc:kap:jproda:v:62:y:2024:i:3:d:10.1007_s11123-024-00719-1
    DOI: 10.1007/s11123-024-00719-1
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