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arXiv · 2104.13524

Statistical Inference in a Spatial-Temporal Stochastic Frontier Model

Erniel B. Barrios·John D. Eustaquio·Rouselle F. Lavado
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Abstract

The stochastic frontier model with heterogeneous technical efficiency explained by exoge-nous variables is augmented with a spatial-temporal component, a generalization relaxing the panel independence assumption in a panel data. The estimation procedure takes advantage of additivity in the model, computational advantages over maximum likelihood estimation of parameters is exhibited. The spatial-temporal component can improve estimates of technical efficiency in a production frontier that is usually biased downwards. We present a test to veri-fy model assumptions that facilitates estimation of parameters.

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Erniel B. Barrios, John D. Eustaquio, Rouselle F. Lavado. 2021-04-28. Statistical Inference in a Spatial-Temporal Stochastic Frontier Model. https://arxiv.org/abs/2104.13524

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