Nonparametric estimation of stochastic frontier models with weak separability

A-Tier
Journal: Journal of Econometrics
Year: 2024
Volume: 238
Issue: 2

Authors (2)

Centorrino, Samuele (International Monetary Fund (I...) Parmeter, Christopher F. (not in RePEc)

Score contribution per author:

2.018 = (α=2.02 / 2 authors) × 2.0x A-tier

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

Abstract

We propose a robust and versatile approach to estimate the stochastic frontier model which avoids parametric assumptions. Our approach requires a single continuous covariate which monotonically influences the conditional mean of inefficiency. Subject to these conditions, the frontier and the conditional mean of inefficiency can be estimated nonparametrically. The estimator we propose uses local least squares and marginal integration making it easy to implement across statistical software. A range of Monte Carlo simulations suggests that when our main identification condition holds, our proposed estimator outperforms other proposals that currently exist. Finally, we provide an application to the study of undercounting COVID-19 cases across the United States. Whereas our method indicates significant undercounting, consistent with existing evidence, other nonparametric methods suggest far less undercounting.

Technical Details

RePEc Handle
repec:eee:econom:v:238:y:2024:i:2:s0304407623003573
Journal Field
Econometrics
Author Count
2
Added to Database
2026-01-25