Derivation of marginal effects of determinants of technical inefficiency

Kumbhakar, SC; Sun, K

Abstract

In efficiency studies using the stochastic frontier approach, the main focus is to explain inefficiency in terms of some exogenous variables and computation of marginal effects of each of these determinants. Although inefficiency is estimated by its mean conditional on the composed error term (the Jondrow et al., 1982 estimator), the marginal effects are computed from the unconditional mean of inefficiency (Wang, 2002). In this paper we derive the marginal effects based on the Jondrow et al. estimator and use the bootstrap method to compute confidence intervals of the marginal effects.

Citation

Kumbhakar, S., & Sun, K. (2013). Derivation of marginal effects of determinants of technical inefficiency. Economics Letters, 120(2), 249-253. https://doi.org/10.1016/j.econlet.2013.04.041

• Journal Article Type: Article
• Acceptance Date: Apr 24, 2013
• Publication Date: Aug 1, 2013
• Deposit Date: May 29, 2015
• Journal: Economics Letters
• Print ISSN: 0165-1765
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 120
• Issue: 2
• Pages: 249-253
• DOI: https://doi.org/10.1016/j.econlet.2013.04.041
• Publisher URL: http://dx.doi.org/10.1016/j.econlet.2013.04.041
• Related Public URLs: http://www.journals.elsevier.com/economics-letters/