Expected Efficiency Ranks from Parametric Stochastic Frontier Models

In the stochastic frontier model, we extend the multivariate probability statements of Horrace (J Econom, 126:335-354, 2005) to calculate the conditional probability that a firm is any particular efficiency rank in the sample. From this, we construct the conditional expected efficiency rank for each firm. Compared to the traditional ranked efficiency point estimates, firm-level conditional expected ranks are more informative about the degree of uncertainty of the ranking. The conditional expected ranks may be useful for empiricists. A Monte Carlo study and an empirical example are provided

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Year of publication:	2015
Authors:	Richards-Shubik, Seth
Other Persons:	Horrace, William C. (contributor) ; Wright, Ian A (contributor)
Publisher:	[2015]: [S.l.] : SSRN
Subject:	Technische Effizienz \| Technical efficiency \| Effizienz \| Efficiency \| Theorie \| Theory \| Ranking-Verfahren \| Ranking method \| Produktionsfunktion \| Production function \| Stochastischer Prozess \| Stochastic process
Description of contents:	Abstract [papers.ssrn.com]