Fixed-effect estimation of technical efficiency with time-invariant dummies

Research output: Contribution to journalArticle

3 Scopus citations

Abstract

"Within" estimation of the fixed-effect stochastic frontier model does not identify parameters on time-invariant explanatory variables. If time-invariant variables are important production inputs, then standard efficiency estimates are biased. This note details bias correction, when time-invariant inputs are dummy variables.

Original languageEnglish (US)
Pages (from-to)247-252
Number of pages6
JournalEconomics Letters
Volume95
Issue number2
DOIs
StatePublished - May 1 2007

Keywords

  • Bias
  • Stochastic frontier
  • Technical efficiency

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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