Alternative technical efficiency measures: skew, bias and scale
In the fixed-effects stochastic frontier model an efficiency measure relative to the best firm in the sample is universally employed. This paper considers a new measure relative to the worst firm in the sample. We find that estimates of this measure have smaller bias than those of the traditional me...
| Main Authors: | , |
|---|---|
| Other Authors: | |
| Format: | Journal Article |
| Language: | English |
| Published: |
2013
|
| Subjects: | |
| Online Access: | https://hdl.handle.net/10356/105568 http://hdl.handle.net/10220/17036 http://dx.doi.org/10.1002/jae.1190 |
| _version_ | 1811679681247707136 |
|---|---|
| author | Feng, Qu. Horrace, William C. |
| author2 | School of Humanities and Social Sciences |
| author_facet | School of Humanities and Social Sciences Feng, Qu. Horrace, William C. |
| author_sort | Feng, Qu. |
| collection | NTU |
| description | In the fixed-effects stochastic frontier model an efficiency measure relative to the best firm in the sample is universally employed. This paper considers a new measure relative to the worst firm in the sample. We find that estimates of this measure have smaller bias than those of the traditional measure when the sample consists of many firms near the efficient frontier. Moreover, a two-sided measure relative to both the best and the worst firms is proposed. Simulations suggest that the new measures may be preferred depending on the skewness of the inefficiency distribution and the scale of efficiency differences. |
| first_indexed | 2024-10-01T03:13:01Z |
| format | Journal Article |
| id | ntu-10356/105568 |
| institution | Nanyang Technological University |
| language | English |
| last_indexed | 2024-10-01T03:13:01Z |
| publishDate | 2013 |
| record_format | dspace |
| spelling | ntu-10356/1055682019-12-06T21:53:41Z Alternative technical efficiency measures: skew, bias and scale Feng, Qu. Horrace, William C. School of Humanities and Social Sciences DRNTU::Social sciences::Economic theory In the fixed-effects stochastic frontier model an efficiency measure relative to the best firm in the sample is universally employed. This paper considers a new measure relative to the worst firm in the sample. We find that estimates of this measure have smaller bias than those of the traditional measure when the sample consists of many firms near the efficient frontier. Moreover, a two-sided measure relative to both the best and the worst firms is proposed. Simulations suggest that the new measures may be preferred depending on the skewness of the inefficiency distribution and the scale of efficiency differences. 2013-10-30T04:05:10Z 2019-12-06T21:53:41Z 2013-10-30T04:05:10Z 2019-12-06T21:53:41Z 2012 2012 Journal Article Feng, Q., & Horrace, W. C. (2012). Alternative technical efficiency measures: skew, bias and scale. Journal of applied econometrics, 27(2), 253-268. 1099-1255 https://hdl.handle.net/10356/105568 http://hdl.handle.net/10220/17036 http://dx.doi.org/10.1002/jae.1190 en Journal of applied econometrics |
| spellingShingle | DRNTU::Social sciences::Economic theory Feng, Qu. Horrace, William C. Alternative technical efficiency measures: skew, bias and scale |
| title | Alternative technical efficiency measures: skew, bias and scale |
| title_full | Alternative technical efficiency measures: skew, bias and scale |
| title_fullStr | Alternative technical efficiency measures: skew, bias and scale |
| title_full_unstemmed | Alternative technical efficiency measures: skew, bias and scale |
| title_short | Alternative technical efficiency measures: skew, bias and scale |
| title_sort | alternative technical efficiency measures skew bias and scale |
| topic | DRNTU::Social sciences::Economic theory |
| url | https://hdl.handle.net/10356/105568 http://hdl.handle.net/10220/17036 http://dx.doi.org/10.1002/jae.1190 |
| work_keys_str_mv | AT fengqu alternativetechnicalefficiencymeasuresskewbiasandscale AT horracewilliamc alternativetechnicalefficiencymeasuresskewbiasandscale |