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Incorporating Heterogeneity in the 2TSF Model

In: Two-Tier Stochastic Frontier Analysis for the Social Sciences

Author

Listed:
  • Alecos Papadopoulos

    (Athens University of Economics and Business)

  • Christopher F. Parmeter

    (University of Miami)

Abstract

This chapter introduces heterogeneity in the 2TSF model, in different ways. We develop a model where moments of a distribution depend on covariates and are estimated by maximum likelihood. We also exploit the “scaling property” to obtain a model without distributional assumptions that can be estimated by nonlinear least squares. The empirical application of the chapter compares the various approaches.

Suggested Citation

  • Alecos Papadopoulos & Christopher F. Parmeter, 2025. "Incorporating Heterogeneity in the 2TSF Model," Springer Books, in: Two-Tier Stochastic Frontier Analysis for the Social Sciences, chapter 0, pages 173-194, Springer.
    • Handle: RePEc:spr:sprchp:978-3-031-81513-3_8
    DOI: 10.1007/978-3-031-81513-3_8
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