Measuring profit efficiency with McFadden's gauge function

Research output: Contribution to journalArticle

1 Scopus citations

Abstract

Traditional input or output-based technical efficiency measures render composed error stochastic profit frontier estimation intractable for cross-sectional data. An alternative measure based on the gauge function simplifies estimation, permitting econometric techniques commonly used for stochastic cost frontiers.

Original languageEnglish (US)
Pages (from-to)272-277
Number of pages6
JournalEconomics Letters
Volume88
Issue number2
DOIs
StatePublished - Aug 1 2005
Externally publishedYes

Keywords

  • Efficiency
  • Gauge function
  • Stochastic frontier analysis
  • Translog profit function

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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