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Selected Works of William C Horrace
Article
Fixed-Effect Estimation of Technical Efficiency with Time-Invariant Dummies
Economics - All Scholarship
  • Qu Feng, Syracuse University
  • William C Horrace, Syracuse University
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Document Type
Article
Date
10-11-2006
Keywords
  • Stochastic frontier,
  • technical effiency,
  • bias
Disciplines
Description/Abstract

“Within” estimation of the fixed-effect stochastic frontier model does not identify parameters on time-invariant explanatory variables. If time-invariant variables are important production inputs, then standard efficiency estimates are biased. This note details bias correction, when time-invariant inputs are dummy variables.

Source
local input
Creative Commons License
Creative Commons Attribution 3.0
Citation Information
Qu Feng and William C Horrace. "Fixed-Effect Estimation of Technical Efficiency with Time-Invariant Dummies" (2006)
Available at: http://works.bepress.com/horrace/25/