Browsing by Subject Frontier production function

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  • BB.0000804_TUMH544. Formulation and Estimation of stochastic.pdf.jpg
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  • Authors: Dennis Aigner (1977)

  • Previous studies of the so-called frontier production function have not utilized an adequate characterization of the disturbance term for such a model. In this paper we provide an appropriate specification, by defining the disturbance term as the sum of symmetric normal and (negative) half-normal random variables. Various aspects of maximum-likelihood estimation for the coefficients of a production function with an additive disturbance term of this sort are then considered.