More advanced material is covered in kumbhakar and lovell 2000. The benchmark stochastic production frontier model 5 3. Stochastic frontier analysis is one such technique to model producer behavior. Immensely helpful to the applied researcher, this book bridges the chasm between theory and practice, expanding the range of applications in which production frontier analysis. Fixed and random effects in stochastic frontier models. Seale jr and others published stochastic frontier analysis find, read and cite.
Pdf stochastic frontier analysis and efficiency estimation. It deals with stochastic frontier production, cost and profit functions. Stochastic frontier analysis request pdf researchgate. A practitioners guide to stochastic frontier analysis. Kumbhakar and others published stochastic frontier analysis. Stochastic frontier data envelopment analysis limdep nlogit. Wilson 2002, nonparametric tests of return to scale, european journal of operational research, 9, 1152 wang, h. The frontier program requires you to prepare two files for estimating stochastic frontier production and cost functions. Efficiency and distributional impact lessons from asia, adb economics, working paper series, no. The stochastic frontier analysis model was developed by aigner, lovell, and. The same forms are used for cross section and panel data forms. Inefficiency, heterogeneity and spillover effects in. Observed and unobserved heterogeneity in stochastic frontier.
A practitioners guide to stochastic frontier analysis using. Lecture 4 day 3 stochastic frontier analysis ordinary least. While we do not explicitly address outliers here, ours is the. Jan 26, 2015 a practitioners guide to stochastic frontier analysis using stata ebook written by subal c. Parametric methods, like stochastic frontier analysis sfa, thick frontier approach tfa and distribution free approach dfa. A practitioners guide to stochastic frontier analysis using stata a practitioners guide to stochastic frontier analysis using stata provides practitioners in academia and industry with a stepbystep guide on how to conduct efficiency analysis using the stochastic frontier approach. Kumbhakar department of economics state university of new york binghamton, ny 902, usa email. A practitioners guide tostochastic frontier analysis using stata this is a great books thati think are not only fun to read but also very educational. He specializes in productivity and efficiency analysis, with particular emphasis on the theory and application of stochastic frontier sf models.
In the rst stage a stochastic frontier equation was estimated excluding the exogenous variables, typically by. This paper tackles the problem of aggregate tfp measurement using stochastic frontier analysis. This book develops econometric techniques for the estimation. Stochastic frontier analysis the extensive literature on sfa has been summarized comprehensively by kumbhakar and lovell, 2000.
A practitioners guide to stochastic frontier analysis using stata by subal c. Mar 10, 2003 since these frontiers envelop rather than intersect the data, and since the authors continue to maintain the traditional econometric belief in the presence of external forces contributing to random statistical noise, the work is titled stochastic frontier analysis. Handling endogeneity in stochastic frontier analysis, economics bulletin, accessecon, vol. Foundations and advances, cepa working papers series wp022018, school of economics, university of queensland, australia. The conventional panel data estimators assume that technical or cost inefficiency is time invariant. Horncastle stochastic frontier analysis using stata provides practitioners in academia and industry with a stepbystep guide on how to conduct efficiency analysis using the stochastic frontier approach. This book provides exceptional introductions to beginning and advanced topics in this area and stata examples using code written by the authors. The approach explicitly recognises that production function represents technically maximum feasible output level for a given level of output. Stochastic frontier models and economic efficiency. Kumbhakar sc, lovell ck 2000 stochastic frontier analysis. Stochastic frontier analysis sfa is a family of methods in this category developed by aigner et al. Data were collected on a sample of 185 rice farmers in the departments of zou and collines. Horncastle stochastic frontier analysis using stata provides practitioners in academia and industry with a stepbystep guide on how to conduct efficiency.
There is a good section on furthermore, there are some producers approach these frontiers. Stochastic frontier production method was used to analyze producers technical efficiency. Stochastic frontier analysis miami herbert business. Stochastic frontier analysis it is a parametric technique that uses standard production function methodology. Kumbhakar and lovell 2000 provide a complete summary of both the theory and techniques used in stochastic frontier production, cost, and pro. Apractitioners guide to stochastic frontier subal c. Pdf stochastic frontier analysis, kumbhakar, subal c. Kumbhakar is a distinguished research professor at the state university of new york, binghamton.
The function load loads the data file and creates the database. K 2000, stochastic frontier analysis, cambridge university press, u. Sequential modelling ensures that the models are nested and can be compared. Pdfbocker lampar sig inte for lasning pa sma skarmar, t ex mobiler. No 201710, working papers from university of miami, department of economics abstract. We estimate a world production frontier for a sample of 75 countries over a long period. Arne henningsen has slightly modified this computer program. The models reported in table 2 were also fitted sequentially, starting with the standard stochastic frontier model, followed by the model with a heterogeneity element and finally by the two spatial stochastic frontier models that capture spillover effects in the data.
Stochastic frontier analysis or sfa is one such technique to model producer behavior. No 201710, working papers from university of miami, department of economics. Kop stochastic frontier analysis av subal c kumbhakar, c a knox lovell pa. Horncastle provides an excellent introduction to stochastic frontier analysis. Arne henningsen has slightly modified this computer program the user can specify the instruction file by an optional argument at the command line now. Stochastic frontier, nonparametric, latent class, sample selection, panel data, closed skew normal. A practitioners guide to stochastic frontier analysis using statakumbhakar 1. How to use frontier program to estimate different types of efficiency models an application of sfa to indian banking if time permits references 1.
Outliers have been considered in the data envelopment analysis dea literature. Terrell, 2001, measuring potential efficiency gains from deregulation of electricity generation. Apractitioners guide to stochastic frontier analysis using stata subal c. An econometric approach find, read and cite all the research you need on researchgate. Stochastic frontier models and economic efficiency estimation william greene stern school of business, new york university 7 kleit, a. The bauerkumbhakar decomposition of tfp is applied to a smaller sample in order to evaluate the effects of changes in efficiency technical and allocative, scale effects, and technical change. Stochastic frontier analysis using sfamb for ox journal of. Cambridge core statistics for econometrics, finance and insurance stochastic frontier analysis by subal c. Pdf on jan 1, 2008, christopher cornwell and others published stochastic frontier analysis and efficiency estimation find, read and cite all the research you need on researchgate.
Based on benchmarking, that is, a units performance is compared with a reference performance socalled efficient frontier. Some documents adopt a twostep analysis method to solve this problem. The density of a csnp,qdistribution includes a pdimensional pdf and a qdimensional cdf. Received stochastic frontier analyses with panel data have relied on traditional fixed and random effects models. Rouselle lavado and gabriel domingo 2015 public service spending. Prasada rao school of economics the university of queensland, australia. Kumbhakar, hungjen wang, alanhorncastle a practitioners guide to stochastic frontier analysisusing stata by subal c. We highlight endogeneity issues, recent advances in generalized panel data stochastic frontier models, nonparametric estimation of the frontier, quantile estimation and distribution free methods. The twotiered stochastic frontier model has enjoyed success across a range of application domains where it is believed that incomplete information on both sides of the market leads to surplus which buyers and sellers can extract. These methods originate from operations research and use linear programming to calculate an efficient deterministic frontier against which units are compared.
Estimate the impact of thi load on technical e ciency i starting point. In the rst stage a stochastic frontier equation was. Stochastic frontier analysis is a complete textbook on stochastic frontier models. Modern textbook presentations of production economics typically treat producers as successful optimizers. Stochastic frontier analysis using stata sage journals. Amazon advertising find, attract, and engage customers. The many theoretical and methodological contributions building upon those works are well documented in kumbhakar 2003, coelli, et al. A practitioners guide to stochastic frontier analysis using stata subal c. The user can specify the instruction file by an optional argument at the command line now. A computer program for stochastic frontier production and cost function estimation. In these crosssectional models, the parameters of the stochastic frontier and the determinants of ine. Stochastic frontier analysis sfa is a family of methods in this category.
Islamic banking caught attention due to its resilience to the significant shocks that hit the economy in late 2008. A practitioners guide to stochastic frontier analysis using stata ebook written by subal c. Stochastic frontier data envelopment analysis limdep. Lecture 4 day 3 stochastic frontier analysis ordinary. Analysis in parallel with stochastic frontier estimation and analysis the only package available that has both of these methods in one program input and output oriented inefficiency retained in the data set for further analysis. Models for crosssectional and panel data are presented and discussed. We propose extensions that circumvent two shortcomings of these approaches. Subal kumbhakar, corresponding author, department of economics, state university of new york at binghamton. Subal kumbhakar and c lovell 2000 stochastic frontier analysis, cambridge. Horncastle oxera consulting llp, oxford, uk ig cambridge university press. Stochastic frontier analysis using stata provides practitioners with a stepbystep guide on how to conduct efficiency analysis using the stochastic frontier approach. An application of stochastic frontier analysis subal c. Stochastic frontier analysis subal c kumbhakar, c a knox lovell. Other authors have acknowledged the sample selection issue in stochastic frontier studies.
Lecture 4 day 3 stochastic frontier analysis free download as powerpoint presentation. Stochastic cost inefficiency estimates and rankings of. The authors explain in detail how to estimate production, cost, and profit efficiency and introduce the basic theory of each model in an accessible way. Stochastic cost inefficiency estimates and rankings of public. The frontier program requires you to prepare two files. Frontier models, journal of applied statistics, 27, 779802 simar, l. Mar 14, 2016 a practitioners guide to stochastic frontier analysis using statakumbhakar 1. Stochastic frontier analysis using stata provides practitioners in academia and industry with a stepbystep guide on how to conduct efficiency analysis using the stochastic frontier approach. Later, kumbhakar and lovell 2000 provide a further detailed explanation. Stochastic frontier analysis or sfa is one such technique to. Kumbhakar binghamton university, ny hungjen wang national taiwan university alan p. Subal kumbhakar, christopher parmeter and valentin zelenyuk. Review every so often a book is written that pulls together a large subject matter in an accessible way, covering both theoretical and applied developments. The density of a csnp,qdistribution includes a pdimensional pdf and a q dimensional cdf.
These contributions were framed in a cross sectional data framework. A practitioners guide to stochastic frontier analysis using stata, cambridge books, cambridge university press, number 9781107029514. The analysis of technical change and inefficiency change with panel data is also discussed in detail. Second, the fixed and random effects estimators force any time invariant cross unit heterogeneity into. Constant, increasing or nonincreasing returns to scale. Stochastic frontier models and efficiency analysis e5 e62. This research aims to evaluate the efficiency of a sample of 66 banks including both islamic and traditional banks in various countries ranging from egypt, pakistan, bangladesh, saudi arabia, kuwait, qatar, iraq, emirates, sudan, turkey, bahrain and jordan throughout 20092014. Knox lovell this book develops econometric techniques for the estimation of production, cost and profit frontiers, and for the estimation of the technical and economic efficiency with which producers approach these frontiers. K85 2000 338 dc21 9931297 cip isbn 0 521 48184 8 hardback.
203 647 757 43 1130 161 1548 1307 164 468 128 177 13 1153 111 16 162 672 1079 603 1409 772 1379 892 908 831 825 669 1458