Nonparametric estimation of the determinants of inefficiency |
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| Authors: | Christopher F. Parmeter Hung-Jen Wang Subal C. Kumbhakar |
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| Affiliation: | 1.University of Miami,Miami,USA;2.National Taiwan University,Taipei,Taiwan;3.Academia Sinica,Taipei,Taiwan;4.State University of New York at Binghamton,Binghamton,USA;5.University of Stavanger Business School,Stavanger,Norway |
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| Abstract: | We consider the benchmark stochastic frontier model where inefficiency is directly influenced by observable determinants. In this setting, we estimate the stochastic frontier and the conditional mean of inefficiency without imposing any distributional assumptions. To do so we cast this model in the partly linear regression framework for the conditional mean. We provide a test of correct parametric specification of the scaling function. An empirical example is also provided to illustrate the practical value of the methods described here. |
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