{"title":"A solution for multicollinearity in stochastic frontier production function models","authors":"Elkin Castaño, S. Gallón","doi":"10.17533/UDEA.LE.N86A01","DOIUrl":null,"url":null,"abstract":"This paper considers the problem of collinearity among inputs in a stochastic frontier production model, an issue that has received little attention in the econometric literature. To address this problem, a principal-component-based solution is proposed, which allows carrying out a joint interpretation of technical efficiency and the technology parameters of the model. Applications of the method to simulated and real data show its usability and effective performance.","PeriodicalId":52205,"journal":{"name":"Lecturas de Economia","volume":"1 1","pages":"9-23"},"PeriodicalIF":0.3000,"publicationDate":"2017-01-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.17533/UDEA.LE.N86A01","citationCount":"7","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Lecturas de Economia","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.17533/UDEA.LE.N86A01","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q4","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 7
Abstract
This paper considers the problem of collinearity among inputs in a stochastic frontier production model, an issue that has received little attention in the econometric literature. To address this problem, a principal-component-based solution is proposed, which allows carrying out a joint interpretation of technical efficiency and the technology parameters of the model. Applications of the method to simulated and real data show its usability and effective performance.
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