Estimating Stochastic Ray Production Frontiers
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Estimating Stochastic Ray Production Frontiers. / Tsionas, Mike ; Henningsen, Arne; Izzeldin, Marwan; Paravalos, Evaggelos .
Department of Food and Resource Economics, University of Copenhagen, 2019.Research output: Working paper › Research
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TY - UNPB
T1 - Estimating Stochastic Ray Production Frontiers
AU - Tsionas, Mike
AU - Henningsen, Arne
AU - Izzeldin, Marwan
AU - Paravalos, Evaggelos
PY - 2019
Y1 - 2019
N2 - In this paper, we consider the stochastic ray production function that has been revived recently by Henningsen et al. (2017). We use a profit-maximizing framework to resolve endogeneity problems that are likely to arise, as in all distance functions, and we derive the system of equations after incorporating technical inefficiency. As technical inefficiency enters non-trivially into the system of equations and the Jacobian is highly complicated, we propose Monte Carlo methods of inference. We illustrate the new approach using US banking data and we also address the problems of missing prices and selection of ordering for outputs.
AB - In this paper, we consider the stochastic ray production function that has been revived recently by Henningsen et al. (2017). We use a profit-maximizing framework to resolve endogeneity problems that are likely to arise, as in all distance functions, and we derive the system of equations after incorporating technical inefficiency. As technical inefficiency enters non-trivially into the system of equations and the Jacobian is highly complicated, we propose Monte Carlo methods of inference. We illustrate the new approach using US banking data and we also address the problems of missing prices and selection of ordering for outputs.
M3 - Working paper
T3 - IFRO Working Paper
BT - Estimating Stochastic Ray Production Frontiers
PB - Department of Food and Resource Economics, University of Copenhagen
ER -
ID: 227133609