On the Estimation of Technical Inefficiency in the Stochastic Frontier Production Function Model

摘要

In this paper, a method is proposed for separating the error term of the stochastic frontier model into its two components for each observation. This method enables one to estimate the level of technical inefficiency for each observation in the sample, and largely removes what had been viewed as a considerable disadvantage of the stochastic frontier model relative to other models (so-called deterministic frontiers) for which technical inefficiency was readily measured for each observation.