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Improving Predictions of Technical Inefficiency

Christine Amsler et al.

Advances in Econometrics2024https://doi.org/10.1108/s0731-905320240000046011book-chapter
AJG 2
Weight
0.55

What the paper says

The traditional predictor of technical inefficiency proposed by Jondrow, Lovell, Materov, and Schmidt (1982) is a conditional expectation. This chapter explores whether, and by how much, the predictor can be improved by using auxiliary information in the conditioning set. It considers two types of stochastic frontier models. The first type is a panel data model where composed errors from past and future time periods contain information about contemporaneous technical inefficiency. The second type is when the stochastic frontier model is augmented by input ratio equations in which allocative inefficiency is correlated with technical inefficiency. Compared to the standard kernel-smoothing estimator, a newer estimator based on a local linear random forest helps mitigate the curse of dimensionality when the conditioning set is large. Besides numerous simulations, there is an illustrative empirical example.

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https://doi.org/https://doi.org/10.1108/s0731-905320240000046011

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@article{christine2024,
  title        = {{Improving Predictions of Technical Inefficiency}},
  author       = {Christine Amsler et al.},
  journal      = {Advances in Econometrics},
  year         = {2024},
  doi          = {https://doi.org/https://doi.org/10.1108/s0731-905320240000046011},
}

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Improving Predictions of Technical Inefficiency

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Evidence weight

0.55

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.61 × 0.4 = 0.24
M · momentum0.53 × 0.15 = 0.08
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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