Frontier estimation in the presence of measurement error with unknown variance

A-Tier
Journal: Journal of Econometrics
Year: 2015
Volume: 184
Issue: 2
Pages: 379-393

Score contribution per author:

1.341 = (α=2.01 / 3 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Frontier estimation appears in productivity analysis. Firm’s performance is measured by the distance between its output and an optimal production frontier. Frontier estimation becomes difficult if outputs are measured with noise and most approaches rely on restrictive parametric assumptions. This paper contributes to nonparametric approaches, with unknown frontier and unknown variance of a normally distributed error. We propose a nonparametric method identifying and estimating both quantities simultaneously. Consistency and rate of convergence of our estimators are established, and simulations verify the performance of the estimators for small samples. We illustrate our method with data on American electricity companies.

Technical Details

RePEc Handle
repec:eee:econom:v:184:y:2015:i:2:p:379-393
Journal Field
Econometrics
Author Count
3
Added to Database
2026-01-29