The normal-gamma stochastic frontier model was proposed in Greene (1990) and Beckers and Hammond (1987) as an extension of the normalexponential proposed in the original derivations of the stochastic frontier by Aigner, Lovell, and Schmidt (1977). The normal-gamma model has the virtue of providing a richer and more flexible parameterization of the inefficiency distribution in the stochastic fro...

This paper examines the robustness of efficiency score rankings across four distributional assumptions for trans-log stochastic production-frontier models, using data from 1,221 Japanese water utilities (for 2004 and 2005). One-sided error terms considered include the half-normal, truncated normal, exponential, and gamma distributions. Results are compared for homoscedastic and doubly heterosce...

China’s banking system has a relatively high level of state control, while an important task in regulating the is to manage profitability banks. Using stochastic frontier approach assess commercial banks not only allows for bank’s ability generate profits relative leading industry be assessed but also takes into account specifics management technologies used and influence market environment. Th...

The present paper seeks to deal with the issue of technical and economic efficiency of rice producers in the Kou valley, located in the region of the high basins in the western part of Burkina Faso. The stochastic frontier approach was used to estimate the production function, from a CobbDouglas stochastic frontier function and its dual which allow the estimation of the technical, allocative an...

The aim of this paper is to use the concept of the metafrontier function to study the determination of efficiency differentials and Technological Gap Ratio (TGR) on wheat production in Khorasan Razavi province. In this study, we used the metafrontier function and group frontier based on the concept of Stochastic Nonparametric Envelopment of Data analysis (StoNED). The data used in this stud...

The results of Waldman (1982) on the Normal-Half Normal stochastic frontier model are generalized using the theory of the Dirac delta (Dirac, 1930), and distribution-free conditions are established to ensure a stationary point in the likelihood as the variance of the inefficiency distribution goes to zero. Stability of the stationary point and "wrong skew" results are derived or simulated for c...

Conventional approaches for inference about efficiency in parametric stochastic frontier (PSF) models are based on percentiles of the estimated distribution of the one-sided error term, conditional on the composite error. When used as prediction intervals, coverage is poor when the signal-to-noise ratio is low, but improves slowly as sample size increases. We show that prediction intervals esti...

In this study, we use Stochastic Frontier analysis approach to estimate cost efficiency, economies of scale, and technological progress among Iranian banks from 1999 to 2012. The results show that there is a marked difference in cost efficiency before and after the recent financial sanctions against Iranian banking industry. Moreover, the results indicate that specialized government-owned banks...