Elsevier

Journal of Econometrics

Volume 46, Issues 1–2, October–November 1990, Pages 39-56
Journal of Econometrics

Recent developments in the econometric estimation of frontiers

https://doi.org/10.1016/0304-4076(90)90046-VGet rights and content

Abstract

A number of techniques have been developed that expand the range of options available to researchers for estimating frontiers. This paper discusses recent developments in the econometric approach to the estimation of stochastic frontiers such as production, costs, and profit functions. Areas requiring further work are also noted.

References (55)

  • Mark M. Pitt et al.

    The measurement and sources of technical inefficiency in the Indonesian weaving industry

    Journal of Development Economics

    (1981)
  • Peter Schmidt et al.

    Simple tests of alternative specifications in stochastic frontier models

    Journal of Econometrics

    (1984)
  • Peter Schmidt et al.

    Estimating technical and allocative inefficiency relative to stochastic production and cost frontiers

    Journal of Econometrics

    (1979)
  • Peter Schmidt et al.

    Estimating stochastic production and cost frontiers when technical and allocative inefficiency are correlated

    Journal of Econometrics

    (1980)
  • Robin C. Sickles et al.

    Allocative distortions and regulatory transition of the U.S. airline industry

    Journal of Econometrics

    (1986)
  • Rodney E. Stevenson

    Likelihood functions for generalized stochastic frontier estimation

    Journal of Econometrics

    (1980)
  • Kimberly D. Zieschang

    A note on the decomposition of cost efficiency into technical and allocative components

    Journal of Econometrics

    (1983)
  • Mubarik Ali et al.

    Profit efficiency among Basmati rice producers in Pakistan Punjab

    American Journal of Agricultural Economics

    (1987)
  • S. Atkinson et al.

    A test of relative and absolute price efficiency in regulated utilities

    Review of Economics and Statistics

    (1980)
  • S. Atkinson et al.

    Parametric efficiency tests, economies of scale, and input demand in U.S. electric power generation

    International Economic Review

    (1984)
  • George E. Battese et al.

    Estimation of frontier production functions and the efficiencies of Indian farms using panel data from ICRISAT's village level studies

    Journal of Quantitative Economics

    (1989)
  • George E. Battese et al.

    Estimation of a production frontier model with application to the pastoral zone of eastern Australia

    Australian Journal of Agricultural Economics

    (1977)
  • Paul W. Bauer

    An analysis of multiproduct technology and efficiency using the joint cost function and panel data: An application to the U.S. airline industry

  • L.R. Christensen et al.

    Economies of scale in U.S. electric power generation

    Journal of Political Economy

    (1976)
  • Christopher Cornwell et al.

    Production frontiers with cross-sectional and time-series variation in efficiency levels

    Journal of Econometrics

    (1990)
  • W.E. Diewert et al.

    Flexible functional forms and global curvature conditions

    Econometrica

    (1987)
  • M.J. Farrell

    The measurement of productive efficiency

    Journal of Royal Statistical Society A

    (1957)
  • Cited by (459)

    • Measuring cost inefficiency: A dual approach

      2021, Economic Modelling
      Citation Excerpt :

      Even with the addition of stochastic cost frontier models, which apply stochastic frontier models to the estimation of a cost function with inefficiency, there are limited studies on SFA to estimate cost inefficiency (Lai and Kumbhakar, 2019). The main reason for the limited applications is its difficulty in differentiating the two components of cost inefficiency in estimation, which is known as the “Greene problem” (Greene, 1980; Bauer, 1990a). CAI is related to the first-order conditions for cost minimization and cost share equations derived from the first-order conditions.

    View all citing articles on Scopus

    The author would like to thank Gary Ferrier, William H. Greene, C.A. Knox Lovell, and Peter Schmidt for helpful comments. All errors and omissions remain the responsibility of the author.

    View full text