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An alternative method for predicting technical inefficiency in stochastic frontier models

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  • Yoshihiko Tsukuda
  • Tatsuyoshi Miyakoshi

Abstract

The median is proposed as an alternative to the expectation of the conditional distribution in order to predict the technical inefficiency in stochastic frontier production models with panel data. Numerical comparison reveals that the two predictors can take different values when the distribution is skewed.

Suggested Citation

  • Yoshihiko Tsukuda & Tatsuyoshi Miyakoshi, 2003. "An alternative method for predicting technical inefficiency in stochastic frontier models," Applied Economics Letters, Taylor & Francis Journals, vol. 10(11), pages 667-670.
    • Handle: RePEc:taf:apeclt:v:10:y:2003:i:11:p:667-670
    DOI: 10.1080/1350485032000136388
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    References listed on IDEAS

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    1. Battese, George E. & Coelli, Tim J., 1988. "Prediction of firm-level technical efficiencies with a generalized frontier production function and panel data," Journal of Econometrics, Elsevier, vol. 38(3), pages 387-399, July.
    2. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-332.
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    1. Yoshihiko Tsukuda & Tatsuyoshi Miyakoshi, 2006. "Practical illustrations of the two recent contributions to stochastic frontier models," Applied Economics Letters, Taylor & Francis Journals, vol. 13(4), pages 229-233.

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