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A dynamic stochastic frontier approach with persistent and transient inefficiency and unobserved heterogeneity
Author(s) -
Minviel Jean Joseph,
Sipiläinen Timo
Publication year - 2021
Publication title -
agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.29
H-Index - 82
eISSN - 1574-0862
pISSN - 0169-5150
DOI - 10.1111/agec.12636
Subject(s) - inefficiency , frontier , economics , subsidy , econometrics , stochastic frontier analysis , estimation , sample (material) , panel data , microeconomics , geography , chemistry , management , archaeology , chromatography , production (economics) , market economy
This article introduces a dynamic stochastic frontier analysis (SFA) framework with unobserved heterogeneity, persistent and transient inefficiency effects, based on recent advances in the SFA literature. The newly developed dynamic frontier model is applied on a sample of French crop‐livestock farms. The estimates provide useful insights for the estimation of the technical efficiency scores as well as for the analysis of the associations of contextual drivers, such as public subsidies and indebtedness, with technical efficiency.