Open AccessInterpreting Stochastic Frontier Model as Random Coefficient Model and Vice Versa
Author(s) -
Spyros Missiakoulis
Publication year - 2021
Publication title -
journal of statistical and econometric methods
Language(s) - English
DOI - 10.47260/jsem/1042
Subject(s) - inefficiency , random effects model , econometrics , mathematics , frontier , versa , statistics , regression analysis , stochastic modelling , regression , computer science , economics , geography , medicine , meta analysis , archaeology , database , microeconomics
This note explores the relationship between the stochastic frontier model and the random coefficient regression model. It shows how to interpret the former as a special case of the latter and vice versa.JEL classification numbers: C13, C51, D24.Keywords: Stochastic production frontier, Random coefficient regression, Composite error, Technical inefficiency.