Technical Inefficiency and Public Capital in U.S. States: A Stochastic Frontier Approach

Posted: 22 Jun 2000

See all articles by Jaume Puig-Junoy

Jaume Puig-Junoy

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences

Multiple version iconThere are 2 versions of this paper

Abstract

This paper estimates a translog stochastic frontier production function in the analysis of all 48 contiguous U.S. states in the period 1970-1983, to attempt to measure and explain changes in technical efficiency. The model allows technical inefficiency to vary over time, and inefficiency effects to be a function of a set of explanatory variables in which the level and composition of public capital plays an important role. Results indicated that U.S. state inefficiency levels were significantly and positively correlated with the ratio of public capital to private capital. The proportion of public capital devoted to highways is negatively correlated with technical inefficiency, suggesting that not only the level but also the composition of public capital influenced state efficiency.

JEL Classification: C23

Suggested Citation

Puig-Junoy, Jaume, Technical Inefficiency and Public Capital in U.S. States: A Stochastic Frontier Approach. Available at SSRN: https://ssrn.com/abstract=234148

Jaume Puig-Junoy (Contact Author)

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
433
PlumX Metrics