In this paper technical efficiency is introduced via the intercept that evolve over time as a AR(1) process in a stochastic frontier (SF) framework in a panel data framework. Following are the distinguishing features of the model. First, the model is dynamic in nature. Second, it can separate...

This article provides an analytical framework to measure and decompose total factor productivity growth into technical change and economies of scale, using a profit function approach. Both single and multiple output cases are considered.

This article estimates a partially linear model that permits non-linearities of unspecified form in the school quality-earnings relationship. It examines the joint effect of teacher education and pupil-teacher ratios on 1990 earnings using NLSY data. It finds some evidence of non-linearities in...

Zellner and Ryu examined several popular specifications of elasticity of scale that characterizes production functions. This note goes further by combining these functional forms and proposing a model-averaged estimator of elasticity of scale. The methodology used in Bayesin Model Averaging, and...

This paper deals with (i) decomposing total factor productivity growth into input-specific components, (ii) measuring input-specific productivity/efficiency growth, and (iii) testing several neutrality hypotheses in technical change. These issues are addressed in a general framework without...

The empirical literature on estimation of production technology mostly focuses on estimation of dual cost functions. Estimation of a profit function is not that common. Here, we formally test whether the production technology should be represented by a cost or profit function. We also derive...