IDEAS home Printed from https://ideas.repec.org/p/aiz/louvar/2022009.html
   My bibliography  Save this paper

Panel stochastic frontier analysis with dependent error terms

Author

Listed:
  • El Mehdi, Rachida
  • Hafner, Christian M.

    (Université catholique de Louvain, LIDAM/ISBA, Belgium)

Abstract

In presence of panel data, technical efficiency is used to compare the performances of Decision Making Units (DMUs). The novelty of this paper is the consideration of the dependence between the two error terms in the case of panel data and the introduction of time effect models in the Stochastic Frontier Analysis (SFA). Hence, our SFA model considers the balanced panel case, several models describing the evolution of the inefficiency over time and the dependence between the two error terms. The inefficiency and noise terms being dependent, a copula function which reflects the dependence between them is included in their joint density. The model is estimated by maximum likelihood and theAkaike Information Criterion (AIC) is used for model selection. Moreover, a likelihood ratio test is performed for the nested models. A bootstrap algorithm is proposed for statistical inference on the Technical Efficiency (T E) measures. Results for Moroccan policy of the production and sales of drinking water from 2001 to 2007 identifies the most and least efficient provinces, and a generally positive trend of estimated TE measures.

Suggested Citation

  • El Mehdi, Rachida & Hafner, Christian M., 2022. "Panel stochastic frontier analysis with dependent error terms," LIDAM Reprints ISBA 2022009, Université catholique de Louvain, Institute of Statistics, Biostatistics and Actuarial Sciences (ISBA).
    • Handle: RePEc:aiz:louvar:2022009
    DOI: https://doi.org/10.33818/ier.1033722
    Note: In: International Econometric Review, 2021, vol. 13(2), p. 24-40
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aiz:louvar:2022009. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Nadja Peiffer (email available below). General contact details of provider: https://edirc.repec.org/data/isuclbe.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.