Handling Endogeneity in Stochastic Frontier Analysis

23 Pages Posted: 18 May 2015 Last revised: 4 Oct 2016

See all articles by Mustafa Karakaplan

Mustafa Karakaplan

Georgetown University - Department of Economics

Levent Kutlu

University of Texas Rio Grande Valley

Date Written: September 25, 2015

Abstract

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

Karakaplan, Mustafa and Kutlu, Levent, Handling Endogeneity in Stochastic Frontier Analysis (September 25, 2015). Available at SSRN: https://ssrn.com/abstract=2607276 or http://dx.doi.org/10.2139/ssrn.2607276

Mustafa Karakaplan

Georgetown University - Department of Economics ( email )

Washington, DC 20057
United States

Levent Kutlu (Contact Author)

University of Texas Rio Grande Valley ( email )

1201 West University Dr
Edinburg, TX TX 78539
United States

HOME PAGE: http://https://faculty.utrgv.edu/levent.kutlu/

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