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Formulation and estimation of stochastic frontier production function models. (English) Zbl 0366.90026
Summary: Previous studies of the so-called frontier production function have not utilized an adequate characterization of the disturbance term for such a model. In this paper we provide an appropriate specification, by defining the disturbance term as the sum of symmetric normal and (negative) half-normal random variables. Various aspects of maximum-likelihood estimation for the coefficients of a production function with an additive disturbance term of this sort are then considered.

91B38 Production theory, theory of the firm
62P20 Applications of statistics to economics
Full Text: DOI
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