生产率与效率lecture8-随机前沿效率1解读.ppt

Slide # The Stochastic Frontier Analysis (SFA) The Stochastic Frontier - History Farrell (1957) 2 measures of firm efficiency technical efficiency (TE) obtain maximal output from given set of inputs allocative efficiency (AE) use inputs in optimal proportions, given input prices History (cont.) Recall technical efficiency (TE) allocative efficiency (AE) Focus on TE only For simplicity in explanation of stochastic frontiers (SF) History (cont.) To calculate efficiency must know production function of fully efficient firm Never know it Farrell estimate fully efficient production function History (cont.) Estimate fully efficient production function Two ways 1. non-parametric piece-wise linear technology Charnes, Cooper others DEA (not Drug Enforcement Agency!) ignore in this session History (cont.) Estimate fully efficient production function Two ways 1. non-parametric piece-wise linear technology Charnes, Cooper others DEA (Data Envelopment Analysis) ignore in this session History (cont.) Estimate fully efficient production function Two ways 2. parametric function Aigner,Lovell and Schmidt, others History (cont.) Consider a production function ln yi = xi ? i = 1,2,….,N ln yi is log of scalar output for i-th firm xi is row vector of logs of K inputs by i-th firm ? is column vector of K unknown coefficients Firms attempt to maximize the observed output (ln y) produced by inputs (x) given technology and circumstances History (cont.) ln yi = xi ? i = 1,2,….,N so, observed output should = xi ? call xi ? “frontier output” = yF usually observed output (yO) xi ? because of inefficiency ( other reasons) History (cont.) So, usual case is observed output frontier output yO yF ln yi xi ? That is, firm is inefficient History (cont.) Recall ln yi xi ? Aigner Chu (1968) ln yi = xi ? - ui i = 1,2,….,N ui non-negative random variable captures technical inefficiency (TI) in production in i-th firm Aigner Chu (cont.) For i-th firm