A stochastic frontier production function with flexible risk properties

Battese, GE, Rambaldi, AN and Wan, GH (1997) A stochastic frontier production function with flexible risk properties. Journal of Productivity Analysis, 8 3: 269-280. doi:10.1023/A:1007755604744


Author Battese, GE
Rambaldi, AN
Wan, GH
Title A stochastic frontier production function with flexible risk properties
Journal name Journal of Productivity Analysis   Check publisher's open access policy
ISSN 0895-562X
Publication date 1997-01-01
Year available 1997
Sub-type Article (original research)
DOI 10.1023/A:1007755604744
Volume 8
Issue 3
Start page 269
End page 280
Total pages 12
Publisher KLUWER ACADEMIC PUBL
Language eng
Abstract This paper considers a stochastic frontier production function which has additive, heteroscedastic error structure. The model allows for negative or positive marginal production risks of inputs, as originally proposed by Just and Pope (1978). The technical efficiencies of individual firms in the sample are a function of the levels of the input variables in the stochastic frontier, in addition to the technical inefficiency effects. These are two features of the model which are not exhibited by the commonly used stochastic frontiers with multiplicative error structures, An empirical application is presented using cross-sectional data on Ethiopian peasant farmers. The null hypothesis of no technical inefficiencies of production among these farmers is accepted. Further, the flexible risk models do not fit the data on peasant farmers as well as the traditional stochastic frontier model with multiplicative error structure.
Keyword Business
Economics
Social Sciences, Mathematical Methods
Stochastic Frontier Production Function
Production Risks
Technical Efficiency
Panel-data
Efficiency
Firm
Q-Index Code C1
Q-Index Status Provisional Code
Institutional Status Unknown

Document type: Journal Article
Sub-type: Article (original research)
Collection: School of Economics Publications
 
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Created: Tue, 14 Aug 2007, 02:58:13 EST