On the estimation of zero-inefficiency stochastic frontier models with endogenous regressors

Tran, Kien C. and Tsionas, Efthymios (2016) On the estimation of zero-inefficiency stochastic frontier models with endogenous regressors. Economics Letters, 147. pp. 19-22. ISSN 0165-1765

PDF (ZISF-Endog-Aug-2016-Final)
ZISF_Endog_Aug_2016_Final.pdf - Accepted Version
Available under License Creative Commons Attribution Non-commercial No Derivatives.

Download (249kB)


In this paper, we investigate endogeneity issues in the zero-inefficiency stochastic frontier (ZISF) models by mean of simultaneous equation setting. Specifically, we allow for one or more regressors to be correlated with the statistical noise. A modified limited information maximum likelihood (LIML) approach is used to estimate the parameters of the model. Moreover, the firm specific inefficiency score is also provided. Limited Monte Carlo simulations show that the proposed estimators perform well in finite sample.

Item Type:
Journal Article
Journal or Publication Title:
Economics Letters
Additional Information:
This is the author’s version of a work that was accepted for publication in Economics Letters. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Economics Letters, 147, 2016 DOI: 10.1016/j.econlet.2016.08.014
Uncontrolled Keywords:
ID Code:
Deposited By:
Deposited On:
14 Oct 2016 12:24
Last Modified:
22 Nov 2022 03:52