ISSN:
1573-0441
Keywords:
stochastic frontier production function
;
production risks
;
technical efficiency
Source:
Springer Online Journal Archives 1860-2000
Topics:
Economics
Notes:
Abstract This paper considers a stochastic frontier production function which has additive, heteroscedastic error structure. The model allows for negative or positive marginal production risks of inputs, as originally proposed by Just and Pope (1978). The technical efficiencies of individual firms in the sample are a function of the levels of the input variables in the stochastic frontier, in addition to the technical inefficiency effects. These are two features of the model which are not exhibited by the commonly used stochastic frontiers with multiplicative error structures. An empirical application is presented using cross-sectional data on Ethiopian peasant farmers. The null hypothesis of no technical inefficiencies of production among these farmers is accepted. Further, the flexible risk models do not fit the data on peasant farmers as well as the traditional stochastic frontier model with multiplicative error structure.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1023/A:1007755604744
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