Handling Endogeneity in Stochastic Frontier Analysis
23 Pages Posted: 18 May 2015 Last revised: 4 Oct 2016
Date Written: September 25, 2015
We present a general maximum likelihood based framework to handle the endogeneity problem in the stochastic frontier models. We implement Monte Carlo experiments to analyze the performance of our estimator. Our findings show that our estimator outperforms standard estimators that ignore endogeneity.
Keywords: Battese-Coelli Estimator; Endogeneity; Efficiency
JEL Classification: C13
Suggested Citation: Suggested Citation