Efficiency measurement using a latent class stochastic frontier model
Efficiency estimation in stochastic frontier models typically assumes that the underlying production technology is the same for all firms. There might, however, be unobserved differences in technologies that might be inappropriately labeled as inefficiency if such variations in technology are not ta...
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Published in | Empirical economics Vol. 29; no. 1; pp. 169 - 183 |
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Main Authors | , |
Format | Journal Article |
Language | English |
Published |
Heidelberg
Springer Nature B.V
01.01.2004
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Subjects | |
Online Access | Get full text |
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Summary: | Efficiency estimation in stochastic frontier models typically assumes that the underlying production technology is the same for all firms. There might, however, be unobserved differences in technologies that might be inappropriately labeled as inefficiency if such variations in technology are not taken into account. We address this issue by estimating a latent class stochastic frontier model in a panel data framework. An application of the model is presented using Spanish banking data. Our results show that bank-heterogeneity can be fully controlled when a model with four classes is estimated. [PUBLICATION ABSTRACT] |
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Bibliography: | ObjectType-Article-2 SourceType-Scholarly Journals-1 ObjectType-Feature-1 content type line 23 |
ISSN: | 0377-7332 1435-8921 |
DOI: | 10.1007/s00181-003-0184-2 |